European foreign affairs ministers have formally endorsed a decision to postpone until the end of September the possible application of sanctions against the United States in a conflict over US steel tariffs.

EU diplomats agreed in principle on the postponement last Friday, when the European Commission recommended a delay after Washington offered new concessions on EU steel imports.

The European Union postponed until September 30th a decision to apply sanctions, which would have included a surtax of 100 per cent on a list of US products.

The Commission said the postponement was justified by the "last minute" exemptions granted by the United States but warned "further US steps are necessary".

The move was the second time the European Union had postponed its decision to retaliate against temporary US tariffs of up to 30 per cent on some steel imports with sanctions.

The European Union had already postponed the application of sanctions until July 19th awaiting exemptions for EU steelmakers.

The EU has threatened retaliation of up to $380 million (€376.5 million) to protest against US President George Bush's decision in March to impose three-year tariffs of up to 30 per cent on selected steel imports.

The US duties affect about €2.3 billion worth of EU exports.

Washington's trading partners were outraged at Mr Bush's decision to impose the tariffs, which he said were necessary to allow the struggling US steel industry time to restructure.

The European Union, Japan and other parties have challenged the legitimacy of the tariffs at the World Trade Organisation (WTO) and the Commission expects the WTO to condemn the measures in the second half of next year.

If the duties are deemed by the WTO to violate global trade rules, the United States will have to withdraw them or face further countermeasures targetting more than two billion dollars of its exports to the EU.