EU Erects Own Steel Barriers

The European Union’s head office formally adopted tariffs of up to 26% on steel Wednesday to prevent a feared flood of cheap imports from countries hit by U.S. protective measures.

Labeling the U.S. tariffs, which took effect last week, “unfounded, unnecessary and unfair,” EU officials said they were forced to respond in kind to safeguard Europe’s own shaky steel industry.

Warning against “over-dramatization,” however, they also appealed for a truce to avert a transatlantic war.

“The EU is not seeking confrontation,” European Commission President Romano Prodi said. “We are quite simply defending, as we have to do, our ... interests.”

In Washington, the Bush administration said it would ask for consultations with the EU over the higher tariffs, the first step in bringing a case against the EU at the World Trade Organization.

“How can the EU demonstrate injury under the WTO rules when the United States hasn’t even started collecting the new tariffs and there hasn’t been time for an import surge?” asked Richard Mills, a spokesman for U.S. Trade Representative Robert Zoellick.

The United States exports more than $1 billion in steel products to Europe on an annual basis.

Trade commissioner Pascal Lamy insisted the EU was acting “in strict respect” for World Trade Organization rules, which allow countries facing a potentially harmful increase in imports to protect their own industry temporarily.

EU steel imports have gone up 18% since 1998, he said.

The EU charges that the U.S. tariffs, which range up to 30%, are unjustified because U.S. imports have declined by 33% during the same period.

Washington, however, looked at imports of 10 steel products between 1996 and 2000, the last year for which full-year data were available.

It showed imports were at their highest levels for seven of those products in 2000, and at their second-highest levels for the other three, a U.S. trade official said.

The EU measures are to take effect next week and last for at least six months--unless President Bush changes U.S. policy before that.

“These measures won’t last a day longer than the American measures,” Lamy said.