27 November 2003 | Simon Binns
Relations between British purchasers and US steel suppliers are facing disruption after the European Union threatened to impose £200 million of retaliatory sanctions on American imports in a dispute over steel tariffs.
The EU plans to impose tariffs on products from states crucial to George Bush's re-election campaign in 2004, such as orange juice from Florida.
This follows a decision by the World Trade Organisation that the extra tariffs imposed by the US on steel imports in March 2002 infringe WTO rules.
According to one steel consultant, the EU's retaliation "will generate a lot of bad blood between British and US companies" at a time of generally strong relations.
"It could harm the willingness of US firms to deal with UK purchasers," he said.
However, the UK steel industry cautiously welcomed the WTO ruling and the possibility of sanctions.
Ian Rodgers, director of UK Steel, said: "The tariffs have always been a flagrant breach of WTO disciplines.
"While we do not want the escalation in trade barriers that this retaliation would entail, the EU is entirely within its rights to impose these extra tariffs, and we fully support the decision."