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EU Retaliates for US Tariffs on Steel Products

European Union foreign ministers have given preliminary approval of a plan to impose trade sanctions on the United States in retaliation for tariffs that Washington has imposed on EU steel products. However, negotiations on the dispute are continuing, and Washington has already announced some limited exemptions.

Foreign ministers of the 15-nation bloc backed a European Commission proposal for $300 million in tariffs on U.S. goods, including steel, textiles and orange juice - if Washington fails to make satisfactory compensatory offers for its new steel duties.

EU Trade Commissioner Pascal Lamy says the European Union is showing firmness but is not trying to raise tensions. Mr. Lamy, speaking through an interpreter, said some progress is being made. His interpreter said, "I am sure you will appreciate neither we nor the Americans state on a daily basis exactly where we are in the negotiations. But things are moving forward."

The European Commission will report to EU ministers by July 19 on the progress in negotiations between the EU and the United States. If no progress is made, ministers will decide by August whether to go ahead with sanctions.

Meanwhile, the U.S. commerce department has announced it will exempt 61 imported steel products from the tariffs imposed by President Bush in March. The products were excluded because U.S. producers do not make them in large enough quantities to meet American demand.

Commerce officials say these exemptions will be followed by further such announcements in coming weeks. Washington has set a deadline of July third for decisions on an initial group of hundreds of exemption requests.

The trans-Atlantic trade dispute began after President Bush in March approved tariffs of up to 30 percent on steel imports to protect financially devastated American producers. The tariffs affect two-thirds of EU steel exports to the United States.