The European Commission is demanding that Washington compensate EU countries for lost steel sales resulting from the U.S. trade restrictions. It has drawn up a list of $2.2 billion worth of U.S. exports on which to impose retaliatory sanctions if the World Trade Organization rules against Washington's steel tariffs, a decision not expected until mid-2003. However, the Commission is recommending that member states put sanctions on some U.S. products as early as June 18 of this year.

In a letter to the United Kingdom Department of Trade and Industry, the Confederation of British Industry described the Commission's plans as a "dangerous step down the road to escalating this dispute. It will solve nothing and risk dragging other sectors into the dispute.... If implemented, it risks a cycle of tit-for-tat actions whose outcome can only be negative for British business interests."

Officials from the BDI, the bosses' federation in Germany, "say many German industries, particularly motor manufacturers, fear the U.S. would respond to EU sanctions by retaliating against their exports," stated an April 12 Financial Times article.

The Japanese government has also called on Washington to withdraw its steel tariffs. In a meeting with Robert Zoellick, the U.S. trade representative, Japanese trade minister Takeo Hiranuma warned, "We would like you to give us a positive response on compensation steps. If not, we may need to prepare retaliatory steps."

On April 10 Zoellick also issued a sharp warning against China joining forces with what he called the "running dogs of European imperialism" in opposing the U.S. steel tariffs. According to a Times article, "Chinese trade officials said Mr. Zoellick's arguments had failed to sway them from their intention to challenge the tariffs in the World Trade Organization."

During a recent visit to Beijing, Chris Patten, the EU external affairs commissioner, pledged to work with the Chinese government in mapping out some joint plans to oppose the U.S. steel tariffs.

Despite some tough talk, the Chinese government is hoping to attract $50 billion in foreign investment this year and to boost its exports to the United States, making Beijing "reluctant to take overt retaliatory measures," against Washington, noted the Times.  
 
 
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