The Hindu : E.U. challenges U.S. tariff on steel

Online edition of India's National Newspaper
Saturday, Mar 09, 2002

International

International

E.U. challenges U.S. tariff on steel

By Batuk Gathani

BRUSSELS MARCH 8. The European Union has filed two complaints with the World Trade Organisation against the action of the U.S. President, George W. Bush, in imposing high tariffs on steel imports. The E.U move has been followed by Japan, Australia and New Zealand.

Ironically, it is the closest allies of the U.S. that will be hit the hardest by the Bush administration's action. The European media on Friday described the action as ``disgraceful''. It has eroded Mr. Bush's credibility as a champion of free trade. He is now rated as a "protectionist" who plays politics with trade. The spillover effect of all this is that it may trigger a major trade war.

It is argued that by imposing high tariff, the U.S. may save one job in the steel industry but may lose eight jobs in other sectors if America's major trading partners too adopt such protectionist measures.

The President of the European Central Bank, Wim Duisenberg, last night said the U.S. move may have been prompted by an overvalued dollar and warned that it risked provoking trade protectionism round the world. The euro is now trading at 88 cents to a dollar and the current sentiment in the markets indicate that unless there is a major upsurge in the recovery of the U.S. economy, the euro will make impressive gains against the dollar.

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