Steel producers from around the world went on a war footing on Wednesday over a US decision to curb steel imports.
The clash erupted after Tuesday's decision by President George W. Bush, facing pressure from the US' struggling steel industry in a congressional election year, to slap tariffs of up to 30 percent on a range of steel imports.
World steel producers, accusing the US of propping up failing steel firms, vowed retaliation and on Wednesday the EU prepared to file a formal complaint with the WTO.
In the face of the international onslaught, Bush's Commerce Secretary Don Evans tried to calm the waters.
"I am confident as we continue to work with our friends and allies around the world, we'll be able to work through this issue," Evans told Reuters on Wednesday.
Earlier in the day, EU Trade Commissioner Pascal Lamy accused the United States of acting in a "wild west" fashion by unilaterally restricting access to its market.
The president of the United Steelworkers of America, Leo Gerard, countered by accusing the EU of becoming the "world's trade bully" and flatly rejected the charge the US steel industry was to blame for its woes.
The problems facing the industry in the US were highlighted on Wednesday when National Steel Corp, one of the nation's largest producers of carbon flat-rolled steel, filed for bankruptcy. There have been over 30 bankruptcies since 1997. The company, which is 53 percent owned by Japan's NKK Corp, was the latest steelmaker to fall prey to depressed prices, high pension costs and tough competition from imports. But the Bush administration's tariff plan, which would be imposed for three years on a variety of imported steel products, does not answer the steel industry's plea for federal assistance with retiree healthcare and pension costs.
The new duties cover 10 steel product categories and range from 8 percent to 30 percent. They take effect March 20 and cover flat-rolled steel and other steel imports from a bevy of countries including Brazil, South Korea, Japan, Taiwan, Russia, Germany, Turkey, France, China, Australia and the Netherlands.
Bush exempted imports from Canada and Mexico because of their partnership with the US in the North American Free Trade Agreement. Also exempted were Israel and Jordan.
Producers said the decision to levy the duties undermined the ideals of free trade preached by Washington and risked triggering a trade war that could damage the world economy.
"Our analysis is ... that this US decision is political, without any legal or even economic foundation," EU Trade Commissioner Lamy said after the bloc's executive discussed emergency measures.
Announcing an immediate appeal to the Geneva-based WTO, the world's trade referee, Lamy said the 15-state bloc would be seeking compensation equal to the damage it said the US was causing EU industry.
Lamy, who said that the EU would be the biggest victim of the new tariffs, added that the bloc would also act to stop a flood of steel from other producers who found their access to the US market blocked.
Other producing countries and regions weighed what action to take and Japan's Trade Minister Takeo Hiranuma said Japan and South Korea would be working closely with Europe. Calling the decision "regrettable," Japanese Foreign Minister Yoriko Kawaguchi said the tariffs would "have a negative impact on open and fair trade" and "only postpone structural adjustment of the US steel industry."