Import rates and protective tariffs: Is an economic war between the EU and the USA a danger?

The decision of the US Administration in March of this year to grant comprehensive protection to the American steel industry has led to a considerable souring of transatlantic trade relations. The EU responded by calling for a WTO investigation and with countermeasures. For Prof. Dieter Ameling, Wirtschaftsvereinigung Stahl, "President Bush may havestarted a conflagration with this decision". The measures of the European Commission are to be welcomed in his opinion. In contrast Prof. Andreas Falke, University of Erlangen-Nuremberg, stresses "that safeguard clauses are legitimate WTO/GATT instruments. The EU, on the other hand, with the announcement of direct retaliation in the absence of American compensations, has once again tightened the screws. Quite possibly the EU itself has violated the WTO rules". For Prof. Wolf Schäfer, University of the German Armed Forces in Hamburg, there is no doubt that the US steel industry has sought protection for years behind high import duties, domestic subsidies and Chapter 11 insolvency procedures instead of competing in open markets. The US steel industry is not being hurt by foreign steel producers, as the Bush Administration and the US International Trade Commission state; their problems are clearly self-made. According to Prof. Gustav Dieckheuer, Münster University, it is neither in the interest of the EU nor the US to escalate the conflict and to provoke a trade war. Because at least at the economic-policy decision-making level, it is clear that additional trade disturbances can only worsen the current unstable economic situation.