France Threatens Trade War Over Steel Tariffs : Commerce: The U.S. move to punish alleged dumping by 19 nations is denounced as protectionism. Options for retaliation are few, however.

Already embroiled with Washington in a trade fight over farm subsidies, France threatened the United States on Thursday with a trade war over a U.S. move to impose punitive tariffs on foreign steel.

The French government accused President Clinton’s new Administration of unfair trade practices, charging that Washington is trying to protect U.S. companies from competition.

“If the American Administration heads up the path of protectionism, countermeasures will be necessary in Europe,” Premier Pierre Beregovoy said at a news conference. “I hope that the Americans will think twice.”

The European Community’s chief trade official called the U.S. action heavy-handed, and German and Dutch steelmakers urged the trade bloc to deal forcefully with the United States. The governments of Japan, South Korea and Australia also denounced the American action.

Despite the condemnation, analysts say, there’s little concrete action that foreign nations can take.

“The U.S. is very unlikely to reverse its position and there’s precious little the Europeans can do about it,” said Sandy Morris, an analyst at NatWest Securities.

On Wednesday, the Commerce Department tentatively decided 19 nations have been “dumping” steel in the United States at unfairly low prices. The finding will result in temporary duties on the steel, ranging from less than 1% to 109%, while hearings determine whether to make the tariffs permanent.

The duties will likely reduce those countries’ sales in the United States. U.S. steelmakers charge that foreign steel has robbed them of sales and cost thousands of American jobs.

Analysts said the tariffs might push up steel prices in the United States and cause prices to rise for cars, appliances and other goods made with steel. However, the steel business worldwide is struggling from overcapacity, and nations unaffected by the new duties could take up the slack.

Dominique Strauss-Kahn, France’s minister for trade and industry, said the 12-nation European Community could file a complaint with the General Agreement on Tariffs and Trade, the 105-nation pact that regulates global trade.

The Europeans could also appeal to the International Trade Commission.

Neither of these avenues appears to offer much hope, analysts said.

The ITC, an independent body which assesses damage to industry caused by dumping, made a preliminary ruling in August supporting American statements that unfair imports were causing “material injury” to U.S. steel makers.

Duties to counteract dumping are legal under GATT rules, a spokesman for the world trade organization said.

European companies such as British Steel and Usinor Sacilor are likely to argue at a specially convened meeting Feb. 9 that their exports don’t break GATT rules on dumping. But even if the majority of countries agree with the European representations, the United States is under no obligation to give way.

GATT dumping rules are contravened if a company sells goods at a lower price than that offered in the country of origin and if such action leads to injury to the importing country’s domestic industry.