Brussels has warned Washington that if it goes ahead with the steel tariffs, then the EU will immediately withdraw from talks in the Organization for Economic Cooperation and Development aimed at voluntarily cutting steel production worldwide and reducing subsidies to the industry.

In addition, the EU would respond with steps designed to prevent "its market from being swamped by a wave of imports diverted from the United States," stated a Financial Times article. "We are ready to act quite quickly," said one EU official.

"The erection of barriers around the world's two largest steel markets would create turmoil in the sector and risk setting off an international chain reaction of protectionist measures," noted the Times.

The U.S. steel bosses are arguing for import restrictions at a time when most steel imports have actually been falling over the past several years, after reaching high levels in the late 1990s during the collapse of the Asian markets.

According to the capitalist rulers, the steel crisis stems from a worldwide overcapacity of steel production, which has driven prices to some of their lowest levels in 20 years.

In capitalist terms, overcapacity means that too much steel is being produced for the steel barons to sell at a profit, not that there is no need for this amount of steel in the world.

The EU Commission has stated its intention to challenge any U.S. curbs on steel imports in the World Trade Organization (WTO).

EU officials got a boost for their stance in late February, when a WTO appellate body ruled that Washington "had violated rules by restricting imports of south Korean line pipe without showing that these had caused problems for American steel producers," the Times reported.  
 
As we go to press...
On March 5 Bush announced tariffs of up to 30 percent on most imported steel. The countries hardest hit by the measure are Japan, south Korea, China, Taiwan, Germany, and Brazil. Governments of the European imperialist powers and Japan said that "they would almost certainly challenge the action before the World Trade Organization, setting the stage for a major trade fight," reported the New York Times.  
 
 
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