Minister flies to US on mission to avert trade war

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The Independent Online

Mike O'Brien, Britain's trade minister, will tomorrow urge his American counterpart to lift tariffs on imported steel and will warn that a transatlantic trade war is in "no one's interest".

On Friday the World Trade Organisation declared that US tariffs of up to 30 per cent were against its rules. The US immediately said it would appeal against the decision, but already the European Union is threatening $2.2bn (£1.3bn) of sanctions on textiles and farm produce in retaliation.

Mr O'Brien is due to meet the US trade representative, Robert Zoellick, in Washington in advance of the next round of trade talks in Cancun, Mexico. But he will use the meeting to ask the Americans to drop the tariffs.

The minister told The Independent on Sunday: "We will not benefit if we get into any sort of trade war. We do not want that. Frankly, our relationship with America in terms of trade is massively beneficial to the European Union and massively beneficial to Britain. The last thing that would benefit us would be to get into some serious widespread disputes with the Americans."

But he warned: "We could get involved in a tit-for-tat situation ... We have been looking at a potential list of steps we can take - retaliatory steps."

Mr O'Brien said America's free market rhetoric was not always matched by reality. "We must make it clear to the Americans that if they talk about liberal markets then let's have some liberal markets. Let's not have a level of protectionism."

The US tariffs have already hammered Corus, the struggling Anglo-Dutch steel producer headed by new chief executive Philippe Varin. The company produces around 1 million tons of steel a year destined for the US. Some 520,000 tons are caught by the US tariff. Last year the Trade and Industry Secretary, Patricia Hewitt, lobbied hard on behalf of Corus to have some of its "speciality" steel exempted from the tariffs.

A European Commission source said a fresh transatlantic trade war "was on a knife edge" and a decision would be taken "in a matter of weeks". The source added: "European steel makers have taken a lot of pain through restructuring. The US tariffs are there to protect the country's unreconstructed producers."