The European Union is set "within days" to fuel the Washington-Brussels trade row by placing quotas on US steel, a report has said.

Officials at Anglo-Dutch steelmaker Corus said they had been told of the move by EU Trade Commissioner Pascal Lamy.

"We have every indication that it will be sooner rather than later and that quotas could be announced by the end of this week," a Corus spokesman said.

Quotas would mark an escalation of a trade row opened two weeks ago when the US imposed tariffs of up to 30% on steel imported from major producing nations.

Declaration

The US claimed the move was prompted by "unfair" government support for steelmakers in other countries.

But leaders of EU nations over the weekend signed a declaration supporting complaint to the World Trade Organisation, and moves towards "possible safeguard measures".

"The European Council has taken note with great concern of the safeguard measures introduced by the US in the steel sector which are not in conformity with WTO rules," the declaration said.

EU steelmakers say they stand to lose $2bn a year to the US tariffs, which are due to last for three years.

Quotas would follow the imposition by the US two weeks ago of tariffs of up to 30% on steel imports.

Aluminium sale

Also on Monday, Corus announced it is to sell its aluminium businesses, as it ends its diversification away from steel.

The company also reported a pre-tax loss of �462m for 2001.

Corus' aluminium businesses were among the company's best performers last year, achieving an overall operating profit of �58m.

The core steel plants lost �446m, as oversupply on world markets, and the global economic slowdown, hit prices.

But Corus predicted that, with steelmakers worldwide slashing output, it would be able to raise prices in coming months.