US President George W Bush is heading for the steel town of Pittsburgh to raise election funds on Monday ahead of an expected climbdown on steel duties.

The US enacted tariffs on foreign steel in March 2002 to protect the industry at home.

But the European Union is threatening sanctions and the World Trade has ruled the duties illegal.

Now, US newspapers report, Mr Bush is ready to ditch the tariffs to avoid a trade war.

The sanctions would have hit US exports to Europe worth as much as $2.2bn a year, risking damage to the nascent economic recovery.

The decision is expected to come later this week, the Washington Post reported.

The paper said industry and White House sources said the move was "all but set in stone", since the sanctions were targeted at electorally important industries such as Florida's citrus farmers.

The steel tariffs themselves - ostensibly aimed at protecting US steelmakers from foreign competition - were widely seen by international rivals as an electoral tool to win over steel-producing states.

But despite the presidential visit to Pittsburgh for a $1m fund-raiser, economists said a repeal of the tariffs could work in his favour, since steel-using industries like the car business want the duties dumped.

Increasing US protectionism - recent import caps and tariff hikes have hit Chinese bras and TVs - was also a risk to the world recovery, they said.