The European Commission yesterday proposed slapping more than $300 million worth of trade sanctions on politically sensitive US products including fruit, T-shirts, steel, guns and even billiard tables in retaliation for US-imposed steel tariffs.
The Commission's proposal for retaliation, which would require majority backing from the 15 EU member states, is designed to "hit the US where it hurts" by targeting exports from states crucial to US president Bush's re-election.
The Commission proposal is aimed at increasing pressure on the US to reconsider its decision last month to impose tariffs of up to 30 per cent on steel imports, including €2.4 billion of steel from Europe.
Some EU states, including Germany and the Nordic countries, have already expressed concern about the implications. Lawyers representing the member states have yet to decide whether short-term retaliation would be legal.
But Pascal Lamy, EU trade commissioner, is convinced the EU has a legal right to retaliate because the US imposed the steel tariffs even though imports of many steel products had actually been declining. "The Commission set out its ideas and while member states will need time to consider them, the initial reactions were positive," said Mr Lamy's spokesman.
