The EU may postpone by an additional three months any decision on whether to impose import duties on US products to strike back at US steel tariffs, EU officials said.
A delay would give breathing space to the world's largest trading partners before the EU imposes taxes worth up to 378 million euros (US$354 million) on US products, in protest at President George W. Bush's decision in March to impose tariffs of up to 30 percent on some steel imports.
Giving the US time to exempt or compensate European companies, a procedure likely to take until October, risks a crumbling of the resolve of all 15 EU nations, analysts said. The EU says it could apply tariffs from June 18.
"Whatever the US gives in terms of exemptions can be used as a justification to delay retaliation," said Paul Brenton, senior research fellow at the Center for European Policy Studies in Brussels. "The closer you get to retaliation, the more governments think about the wider effects. It could be a step towards exacerbating the problem."
The EU and countries including Japan, South Korea and China have filed international trade complaints against the tariffs.
China has said it's ready to strike back with US$94 million of duties on US products. Japan has said it will delay imposing US$4.9 million in tariffs on US steel in an effort to avoid escalating the dispute.
The European Commission today agreed on the mechanism for the retaliatory tariffs, which needs approval by EU foreign ministers at their next meeting on June 10 or June 17, EU officials said. A decision to impose the tariffs must then be approved by a qualified majority of EU governments.
Bush imposed tariffs on a range of steel imports to shield domestic steelmakers after Bethlehem Steel Corp., LTV Corp. and 17 other US steelmakers went bankrupt since 1998.
The EU rejects the US argument that the tariffs are permitted, allowing countries to curb imports that threaten an industry's survival.
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