EU to challenge US over steel tariffs

The European Commission has announced its intention to launch an immediate complaint with the World Trade Organisation (WTO) in Geneva against the US decision to restrict steel imports from the rest of the world.

The US President George Bush decided to impose up to 30 percent tariffs on most imported steel in a bid to help the American steel industry.

US NAFTA partners Canada and Mexico are excluded from the tariffs.

The EU has announced that it will “take whatever measures are necessary to safeguard our own market”. It added in statement that “the US steel industry is already benefiting from numerous protective measures”.

 

EU Trade CommissionerPascal Lamystated that the US decision to protect its steelmakers "is a major setback for the world trading system". According to the Commissioner, the US steel tariffs "will end any hope of finding an internationally agreed solution at the OECD to overcapacity problems faced by the world steel industry, and will not rein in global subsidies".

The EU steelmakers association,Eurofer, condemned the US decision on steel tariffs as "unfair, unwarranted, and likely to be counterproductive". It stated that the decision "appears to place a particularly heavy burden on EU exports", and adds that the decision is not economically justified. Eurofer expects the WTO dispute settlement body to condemn the decision.

TheUS steel industrysees the problems it faces as resulting from cheap imports that are the result of unfair trade practices. It has accused the Europeans of dumping cheap steel on the US market.

 

The world steel market has significant overcapacity and the US is lagging behind European and Asian producers in the necessary restructuring measures. The US International Trade Commission (ITC) ruled at the end of 2001 that foreign steelmakers have been flooding the US market with cheap imports, and recommended that the US administration should impose import tariffs for steel.

 

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