The European Union and the United States edged closer to an all-out trade war on Friday after the World Trade Organisation ruled that American duties of up to 30 per cent on steel imports imposed by the US last March contravene WTO rules.
Brussels threatened to proceed with $US2.2 billion ($3.3 billion) in retaliatory trade sanctions, but the US said it would appeal the decision against its tariffs, which it argues are necessary to protect it from cheap imports during a period of restructuring.
The ruling comes after Europe revealed a $US4 billion package of retaliatory sanctions it planned to impose by the end of the year if America did not revoke a system of tax breaks for multinational corporations doing business overseas which was earlier ruled illegal by the WTO.
The US has attacked the effective European moratorium on GM foods and is likely to find little solace in the highly restrictive import requirements passed by the European Parliament for GM products.
These disputes all come as the trading giants stand at the centre of the deadlocked Doha round of talks on world trade liberalisation.
The European complaint against US steel tariffs has been supported by Japan, South Korea, Norway, Switzerland, China, New Zealand and Brazil. Australia had bilaterally negotiated substantial exemptions to the tariff regime.
In a ruling issued late on Friday, the WTO panel ruled that the US had not proved its domestic steel industry had been harmed by cheaper imports.
The EU was quick to claim victory.
"We would like to urge the US to look at the wider picture all the world's steel exporters are telling them to remove these tariffs . . . the US has been caught red-handed," said a spokeswoman for European Trade Commissioner Pascal Lamy.
Brussels threatened to proceed with $US2.2 billion ($3.3 billion) in retaliatory trade sanctions, but the US said it would appeal the decision against its tariffs, which it argues are necessary to protect it from cheap imports during a period of restructuring.
The ruling comes after Europe revealed a $US4 billion package of retaliatory sanctions it planned to impose by the end of the year if America did not revoke a system of tax breaks for multinational corporations doing business overseas which was earlier ruled illegal by the WTO.
The US has attacked the effective European moratorium on GM foods and is likely to find little solace in the highly restrictive import requirements passed by the European Parliament for GM products.
These disputes all come as the trading giants stand at the centre of the deadlocked Doha round of talks on world trade liberalisation.
The European complaint against US steel tariffs has been supported by Japan, South Korea, Norway, Switzerland, China, New Zealand and Brazil. Australia had bilaterally negotiated substantial exemptions to the tariff regime.
In a ruling issued late on Friday, the WTO panel ruled that the US had not proved its domestic steel industry had been harmed by cheaper imports.
The EU was quick to claim victory.
"We would like to urge the US to look at the wider picture all the world's steel exporters are telling them to remove these tariffs . . . the US has been caught red-handed," said a spokeswoman for European Trade Commissioner Pascal Lamy.
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