United against terror, divided on trade, coalition strains

In Europe, pressure to retaliate mounted yesterday after Bush set steel-import tariffs.

Just as the transatlantic flap over President Bush's "axis of evil" speech was calming down, the US leader has sparked a new row with his European allies by imposing tariffs and quotas on steel imports that threaten a trade war and fresh tensions within the international coalition fighting terrorism.

Three French ministers Thursday branded the steel tariff decision "illegitimate and inappropriate." As German Chancellor Gerhard Schröder joined a chorus of European protest, pressure mounted for retaliatory sanctions against US exports.

European leaders find themselves once again decrying what they see as the US administration's tendency to follow its own interests at the expense of international partnership.

"When the US is caught between domestic pressure and respecting its international commitments, the former prevails," said European Union trade commissioner Pascal Lamy.

Seeking to protect ailing US steel manufacturers, and to preserve jobs, Mr. Bush Tuesday announced steep tariffs of up to 30 percent on imports of steel from the European Union, Russia, Japan, and other producers.

That move, which the president's advisers had warned would infuriate America's biggest trading partners, came as some European leaders were seeking to mend fences with Washington at a particularly sensitive time in international affairs - as US policymakers choose their next target in the war on terrorism.

Tempers on both sides of the Atlantic had flared in the wake of Bush's State of the Union address five weeks ago, in which he branded Iraq, Iran, and North Korea an "axis of evil."

Turning back the flood of criticism unleashed by senior European political figures, French president Jacques Chirac insisted at a press conference last week that France and the United States were on "exactly the same wave-length" in the fight against terrorism.

Echoing that approach, German Chancellor Gerhard Schröder told a German newspaper that "as far as America is concerned, we should not fall back into the old mistrust of the superpower and the Bush administration. Indeed we have had very positive experiences since September 11th."

Spanish Prime Minister Jose Maria Aznar, whose country currently holds the rotating presidency of the European Union, was reported as telling European journalists last week that he felt it "more important than ever that Europe strengthen its ties with the United States."

Such comments seem designed to reassure Washington that although European nations have grave reservations about the wisdom of attacking Iraq, for example, and would wish for more consultation from Washington before it makes foreign-policy decisions, they remain committed to the US-led war on terrorism.

But now, those efforts toward warmer relations appear to have been dimmed by the US decision on steel tariffs, of which the European Union will be the "foremost victim," according to Mr. Lamy. That is because the heaviest tariffs will be imposed on higher-end steel, where European producers are especially strong - and because third-world producers priced out of the US market by the tariffs are expected now to try to flood the European market.

The EU will join China, Japan, and South Korea in a challenge to the US decision at the World Trade Organization, but cannot expect a ruling for at least a year. More immediately, Brussels might apply punitive sanctions on US exports next month, which the EU is entitled to do as a result of a World Trade Organization decision outlawing US tax breaks for exporters, with which Washington has not complied.

Meanwhile, the Russian media is linking a new ban on imports of US chicken to Bush's decision on steel. Russian agriculture officials say, however, that the ban stemmed from grievances regarding production quality and adherence to Russian regulations.