US imposes heavy import duties on European steel

THE UNITED STATES yesterday imposed punitive duties on steel imports from several European countries, including Britain and France, provoking fury from EC capitals and putting world trade negotiations at fresh risk.

Dismissed last night as 'utterly perverse' by one senior European diplomat, the tariffs are directed at 12 countries altogether, half in the EC, and range from 1 per cent to, in the case of Italy, a crippling 59 per cent. The announcement was made by the Commerce Department. The White House made no comment.

The timing of the measure will cause particular consternation, coming just 10 days after the EC and the US resolved long-standing differences over farm subsidies. It had been hoped that the new-found atmosphere of relative transatlantic peace would allow a quick conclusion of the world trade talks on Gatt - the General Agreement on Tariffs and Trade.

Among those targeted is France, with duties of between 26 and 47 per cent. The French government is already opposed to the farm subsidies deal and will hardly welcome fresh antagonism from Washington. Smoothing French sensibilities is likely to be a prime task at the EC summit in Edinburgh next week.

In a statement in Washington, the European Community berated the US administration, accusing it of using a 'legitimate trade policy instrument to exploit and to harass foreign competition and to divert world trade flows, blaming imports for the domestic problems of the American steel industry'.

Although there is no formal link between the Gatt trade round and the US grievances over foreign steel subsidies, EC officials stressed that the US action could only throw grit in the machinery of the Gatt negotiations.

One EC diplomat complained that the Commerce Department seemed to be 'slavishly following the rules of foreign trade policy with complete disregard for the more important issues of Gatt'. He added that the move was 'particularly unhelpful and unwarranted'.

British Steel will be hit with a duty of 19 per cent on its steel plate products. British officials complained that the sanction related to government subsidies given to the company in the early 1980s, since which time it has been privatised.