The Bush administration has decided to repeal its 20-month-old tariffs on imported steel to avoid a trade war that would have included retaliation against products from US states that are politically crucial to Mr George W. Bush's re-election.
Quoting administration and industry sources, the Washington Posthas reported today that Mr Bush would be likely announce the decision this week.
The officials said they had to allow for the possibility that Mr Bush would make some change in the plan, but a source close to the White House said it was "all but set in stone," the Washington Postreported.
A spokesman for the White House denied a decision had been made to repeal the tariffs.
Ending the tariffs 16 months ahead of schedule could spark a political backlash against Mr Bush in next year's presidential election in the pivotal steel-producing states of Ohio, Pennsylvania and West Virginia.
The Postsources said Bush's aides concluded they could not run the risk that the European Union would carry out its threat to impose sanctions on citrus fruit from Florida, farm machinery, textiles and other products.
The European Union, one of a number of trade partners to take action at the WTO over the levies, had warned it was ready to hit Washington with sanctions on up to $2.2 billion (€1.836 bn) of goods within five days of the WTO approving the court ruling.
The Bush administration imposed the duties, initially for up to 30 per cent, in 2002 to help defend the country's struggling steel industry against cheap imports.