The steel industry is suffering from over-capacity

A WTO panel decided in July that US steel tariffs were without justification and ordered the US to either remove the tariffs or face sanctions.

The appeal - which was filed at the last moment - will now mean that any sanctions are delayed for a further nine months while the panel considers the appeal.

The EU, Japan and six other countries filed the original complaint against the US back in March last year.

The EU has already drawn up a list of US products - including textiles and fruit and vegetables - totalling $2.6bn (�1.6bn) on which it wants to impose sanctions in retaliation.

Fury

The controversial trade barriers were introduced by President George W Bush, under pressure from steel manufactures and workers.

The tariffs - of up to 30% on top of normal duties - were designed to protect America's ailing steel industry from a flood of imports.

But they provoked fury amongst other steel exporting countries who say they have been forced to suffer job losses in order to compete in the world market.

The US argues its tariffs are in line with the WTO's Safeguard Agreement, which allows countries to restrict imports temporarily if they threaten "serious injury" to a specific industry.

But the WTO's first report said Washington had failed to provide a "reasoned and adequate explanation" of a link between increased imports and "serious injury" caused to US producers.

Survival

The steel dispute is intensifying just weeks before the start of the World Trade Summit in Cancun, Mexico.

Ministers from more than 140 countries, many of whom are already at odds with each other, will try and thrash out new trade agreements.

The vast majority of changes agreed upon in the last meeting in Doha two years ago have not yet been introduced.