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EU slams U.S. steel tariffs
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December 14, 2001: 5:02 a.m. ET
European Union threatens trade restrictions if U.S. imposes steel tariffs
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LONDON (CNN) - The European Union has threatened to impose trade restrictions against the U.S. if President George W. Bush introduces steel tariffs.
EU Trade Commissioner Pascal Lamy slammed possible U.S. tariffs on steel imports in a hard-hitting speech to the UK Steel Association on Thursday.
Lamy said the EU would launch a World Trade Organisation complaint if the Bush administration goes ahead and slaps tariffs of up to 40 percent on some products.
The proposed U.S. tariffs are meant to force steel exporting countries to cut global production. The U.S. steel industry contends lower-priced imports are being dumped in violation of U.S. trade laws.
Many U.S. steel companies have filed for bankruptcy -- including No.3 U.S. producer, Bethlehem Steel and LTV, the nation's No. 2 steelmaker -- citing the same problems with labour costs and cheap imports.
Earlier this month, U.S. Steel Group, the largest U.S. steelmaker, said it is in talks to buy rival steelmaker National Steel. Meantime, European companies have also merged as demand declines amid a global economic slowdown and increased competition from Asia and Eastern Europe.
France's Usinor, Luxembourg's Arbed and Aceralia of Spain are merging to create the world's biggest steel producer, Arcelor. Anglo-Dutch steelmaker Corus, which was formed by the merger of Hoogevens of the Netherlands and British Steel, has cut more than 6,500 jobs since its formation in 1999.
Lamy said the EU would respond by introducing a surveillance system for steel imports that would allow the EU to move quickly to impose anti-dumping or other trade restrictions if the mooted U.S. measures led to large quantities of foreign steel being diverted to the EU market.
Last week, the U.S. International Trade Commission recommended that Bush provide up to four years of import relief for U.S. steel companies. U.S. steel companies have long argued that the United States has become the dumping ground for excess steel production by foreign countries.
Steel risks joining a number of other transatlantic trade disputes, including rows over an EU ban on hormone-treated beef and over U.S. tax breaks for exporters.
"If adopted the actions recommended to the president would drastically reduce U.S. steel imports with severe implications for both the EU and third countries," said Lamy.
"I want to be very clear that we would have no alternative but to examine all options, both bilateral and multilateral, to protect our industry from the consequences of U.S. action."
--Reuters contributed to this report 
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