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. Last Updated: 07/27/2016

EU Strikes Back With Steel Tariffs of Its Own

BRUSSELS, Belgium -- Acting to shield Europe from a flood of cheap steel from countries recently hit by U.S. tariffs, the European Union has decided to impose its own import taxes.

Tariffs of up to 26 percent will apply to most of the same steel products hit last week by the protective U.S. measure, an EU official said on condition of anonymity.

The tariffs, to be formally approved Wednesday by the EU's executive commission, will apply starting April 3 to imports of 15 listed products above current levels of 11 million tons a year, he said.

The EU fears big steel-producing countries such as China and South Korea -- blocked from the U.S. market by tariffs of up to 30 percent -- will try to unload their excess production on Europe, depressing steel prices and putting jobs at risk.

Under international trade rules, the EU can impose temporary limits on imports if it can show a flood of steel imports is hurting or threatens to hurt its industry.

EU officials concede it's too early to quantify any impact from the new U.S. sanctions. But they argue that EU imports had been surging anyway -- by 20 percent over the past three years -- while U.S. imports have declined over the same period.

"For many steel producers, the U.S. and the [EU] are their only viable export markets," the draft regulation states.

Thus, "it is anticipated that actual serious injury will occur even more rapidly" to EU steel producers because of the new U.S. measures, it said.

In addition to taking actions to safeguard its home market, the EU has started World Trade Organization proceedings to secure up to $2 billion from the United States in compensation for the higher U.S. tariffs.

Such compensation would be in the form of reduced U.S. tariffs on other EU products.

If no agreement on compensation is reached, the EU also has been circulating a list in EU capitals of proposed U.S. products that could be hit with retaliatory tariffs, including steel, textiles and citrus fruits.

The EU safeguard tariffs will be authorized for six months with the possibility of renewal.

Producers in less-developed countries will be excluded, while others will face tariffs on only some export products, the EU official said.

For example, China will face tariffs of 18 percent on hot-rolled coils, the most common steel export. Russia, Ukraine and Kazakhstan, which aren't part of the WTO, will not be included because they have agreements with the EU that already set quotas and tariffs on their imports.