The European Commission yesterday welcomed a US decision this week to exempt more than half the European Union's steel exports from controversial new tariffs, but said it would press on with legal action in the World Trade Organisation over the issue.
The Commission would not be drawn on whether Washington's move made it less likely that the EU would impose countervailing duties on US products.
However, the mood in the steel dispute, which had threatened to break out into an all-out trade war, has grown more conciliatory in recent months.
"This is at first sight a positive action and a signal to the world that the US realises that protectionism has a cost, in terms of higher prices for domestic users and in terms of American credibility in the WTO," said Mr Pascal Lamy, EU trade commissioner.
The Commission said that the exemptions for 178 steel products, the seventh round of exemptions since tariffs of up to 30 per cent were imposed in March, meant that more than half of EU exports would not be hit. However, it has yet to check these figures with European industry.
When the US tariffs were announced, the Commission estimated they would affect more than $2 billion (€2.05 billion) of EU steel exports.
Officials in Brussels also conceded that many EU exporters had yet to be seriously affected by the US measures, as the tariffs had driven up US prices, reducing the deterrent effect of the extra duty on foreign products.
But they maintain that the US tariffs are illegal in themselves, even if their direct impact on individual European producers may not be great.
"What we have obtained until now is far away from what the industry requested," said Mr Salvatore Salerno, a senior Commission trade official.
"We are sure that the US measures are not compatible with the WTO... The important thing is to win the case and make the US drop the measures."
Steelmakers such as ThyssenKrupp, the German group, have also welcomed the latest US move but called for the exemption process to be continued. The US has said it will make no further exemptions this year.
The Commission, which has been waiting for a definitive US stance, now says it will present EU member-states with its decision on whether to call for retaliatory tariffs in mid-September.
It had been due to decide on a first round of up to €379 million in retaliatory tariffs by mid-July. A separate decision on a larger round of retaliatory duties is due next year, if the WTO rules that the US tariffs violated world trade rules.
The WTO decision is expected in March.
