The European business community, already angered by the threat of US sanctions over the banana trade, was yesterday struggling to make sense of the latest war of words between Washington and Brussels.

As US officials claimed victory following an unpublished World Trade Organisation ruling on the banana dispute, it was unclear whether the EU would back down or fight on against earlier adverse WTO rulings.

The uncertainty left European exporters which featured on the original list of goods selected by the US for 100 per cent penal tariffs unsure whether their products would be hit by sanctions or not.

"This is a very difficult situation for European businesses because they have no certainty about what is going to happen," said Ms Monique Julien, director of external affairs for Unice, the main European business organisation,

"Our main concern is to avoid sanctions on companies that would suffer because of an issue they are not directly concerned with," she said.

Mr Erick Boutry, managing director of France's Societe des Caves de Roquefort, said his reaction if sanctions were applied would be "incomprehension".

He said there were no US producers of feta cheese made from sheep's milk, so the company's product did not compete with US manufacturers.

Louis Vuitton, the French leather goods manufacturer, cannot understand why it had been targeted, since it has no connection with the banana trade.

Some businesses said they had already lost revenue because the threat of sanctions had prompted US buyers to redirect orders to other countries.

Business contacts have also been disrupted, posing problems for the future.

To complicate the issue, the US said it would take a few days to refine its original list of imports - worth $520 million but revised down to $362 million last month - because the WTO disputes panel said it was entitled to impose only $191 million of tariffs.

That means that if sanctions go ahead, they will be even more arbitrary, because some companies will be excluded while others will be hit.