The European Union could see a major rise in steel exports diverted to the EU because of a US decision to impose tariffs on some steel imports, the European trade commissioner said today.
"The direct impact would lead to a total loss of $2 billion," Mr Pascal Lamy said of the US move that takes effect on Wednesday.
"But the potential impact from the flood of steel turned away from American borders could be five times greater than the direct impact in the European Union," he said.
European producers, already struggling to cope with a market glut that has caused low steel prices, are wary that the US decision could lead to a wave of cheap steel from Central Europe and Asia entering into the European Union, depressing prices even further.
Mr Lamy said yesterday that measures to be adopted by the European Union were not aimed at "closing the European market, but at avoiding an avalanche of of products from third countries".
The European Union and the United States held initial closed-door talks in Geneva today on EU claims for compensation for the US three-year steel tariffs.
Brussels is claiming compensation under the World Trade Organisation's safeguards agreement that states countries can claim compensation for the amount they believe their exports are harmed by the measures.
AFP