EU expected to unveil own steel tariffs


Korea and Japan are joining the European Union in fighting the steel tariffs imposed this month by the U.S.

BRUSSELS, Belgium (CNN) -- The shape of the European and Asian response to the U.S. steel tariffs is expected to become clearer Friday when the European Union announces protective steps against a possible flood of imports.

The EU will likely announce limits on steel imports and impose a new tariff in response to the U.S. action to put tariffs of up to 30 percent on imports, according to media reports.

The EU move is designed to protect its market from steel imports diverted from the U.S. because of its new tariffs.

The EU will also be be joined by Asian steelmakers Japan and South Korea in filing a complaint with the World Trade Organization against the U.S. action, announced earlier this month by U.S. President George W. Bush.

Japan and South Korea were expected to discuss the steel issue in talks Friday between Prime Minister Junichiro Koizumi, who is visiting Seoul, and South Korea's President Kim Dae-jung.

Both countries said this week they would approach the WTO on the steel issue. Japan's trade and industry minister Takeo Hiranuma said Tokyo planned to work closely with Europe, while Korea said it would also cooperate and look at taking its own action.

Lower than U.S. tariff

An EU source quoted by Reuters news agency said the EU's tariff, to apply to all steel imports beyond recent levels, would be less than the 30 percent maximum set by the U.S. this month.

"We establish what the recent level of imports is. Anything within that is imported as it is now, but anything above that would be subject to a tariff," the source told Reuters.

"The level of that tariff would be lower than the U.S. tariff," the source added.

The European Commission is to determine an average import level and base its quota on that. The tariff will apply to shipments above that quota.

The new system of safeguard measures will apply for six months and be split into two periods of three months.

The EU quotas and tariffs will apply to all steel imports, not just those from the United States, and provision will be made for developing countries.

Fears of a wider trade war have been sparked by EU talk of the need for retaliatory measures if the United States does not agree to give compensation, in the form of lower duties on other products, in return for the steel tariffs.

The EU's retaliatory measures are expected to hit imports of U.S. steel and textiles into Europe.

Reuters contributed to this report.