us and europe on brink of trade war

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    WTO says Bush's steel tariffs break rules · Brussels threatens to retaliate unless Washington backs down

    Andrew Osborn in Brussels and Larry Elliott
    Satu rday July 12, 2003
    The Guardian

    The European Union and the United States were teetering on the brink of a transatlantic trade war last night after Brussels threatened a $2.2bn package of sanctions unless Washington scrapped steel tariffs ruled illegal by the World Trade Organisation yesterday.
    Brussels claimed victory in its fight to force President George Bush to drop measures aimed at shoring up his political support in America's industrial heartlands, but the US said it would appeal against the decision.

    The world's two biggest trading blocks are already at loggerheads over Europe's anti-GM foods regime and America's tax breaks for multinationals.

    Yesterday's ruling comes as EU and US negotiators are attempting to settle their differences in the global trade liberalisation talks.

    A WTO disputes panel said American import tariffs of up to 30% on foreign steel could not be justified under global trade rules and that they should be abandoned as soon as possible.

    Within minutes, the European commission said it would seek to hit pre-selected US products with retaliatory tariffs worth up to $2.2bn (£1.3bn) a year unless Washington dismantled its offending steel tariffs within five days.
 
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