The European Commission met today to discuss emergency measures to protect the European Union's steel industry from a flood of third country imports after the United States imposed huge tariffs on imported steel.
Before the full EU executive held its weekly meeting, key commissioners directly involved in the steel crisis met to discuss a response including an immediate appeal to the World Trade Organisation and urgent safeguard measures to protect the European industry, officials said.
An EU statement said US President George Bush's decision to impose tariffs of up to 30 per cent on imported steel could mean a loss of EU exports to the US market of four million tonnes a year and up to 16 million tonnes of trade diversion.
"In light of this, the EU may be forced to take provisional measures as a matter of urgency to avoid serious consequences for our industry which could undermine the restructuring efforts of the EU steel industry over the last decade," it said.
"Such action would not be designed to cut the current high levels of imports to the EU, but only prevent the negative effects of massive trade diversion caused by the American measures," the EU statement added.
The new US tariffs cover 10 steel-product categories and range from 8 per cent to 30 per cent. They take effect on March 20th and are to be ratcheted down over three years. Imports from Mexico and Canada, partners in the North American Free Trade Agreement, were exempted.
Disputing President Bush's reasoning for throwing up tariff barriers, the EU said the value of US steel imports actually fell by 23 per cent last year and was well below the figures for 1995 and 1996.
European steelmakers, whose shares were battered by the US move, said Washington's action would trigger a global price war.
The US measures will also lead to changed steel trade flows and will therefore entail increased price pressure in all markets outside the United States, Sweden's biggest steel company, SSAB, said in a statement.