The European Union (EU) has decided not to withdraw its complaint about US steel import tariffs, despite America's announcement that a further 178 steel products would be exempted.

Observers said the latest US concessions had been offered as an attempt to avoid a trade war with the EU.

But although European Commission chiefs said they "welcomed" the exemptions covering more than 50% of EU steel exports to the US, they warned that the rest of the tariffs would have to be removed.

"This is at first sight a positive action," said EU Trade Commissioner Pascal Lamy, though he added that the US should "withdraw the remaining WTO illegal measures soonest".

The EU has until late September to decide whether to slap retaliatory sanctions on US products.

Shortage

The official line from the US was that the 178 products were removed from the tariffs because "it was determined that they are not sufficiently available from US producers".

The total number of exempted products has risen to 727, five months after the US introduced three-year tariffs of up to 30% on imported steel to protect its troubled steel industry.

Earlier, Japan said that it too welcomed the exemptions, but that it would still decide by the end of August on what counter measures it would take.

A Japanese trade ministry official said about 70% of Japanese steel exports now fell outside the US tariffs net.

But, he added: "About 650,000 tonnes will still be affected and we are still assessing the matter."

Trade minister Takeo Hiranuma has reportedly said that talks with the US were due to continue.

Anger everywhere

The introduction of the steel tariffs have managed to upset both the US's own steel makers and its trading partners.

At home, there is growing anger among steelmakers which fear that the tariffs will no longer be effective.

Nancy Gravatt, a spokeswoman for the American Iron and Steel Institute, said steel producers were "disappointed at the large number of exclusions granted over industry objections".

"We are crossing the threshold of whether the tariff will do the job that the administration and the industry agreed needed to be done," Gary Hubbard, a spokesman for the United Steel Workers of America Union, said.

Not biased

The US has denied that its concessions were influenced by threats of retaliation from the European Union and Japan.

But the country's steel-consuming companies have complained that the tariffs have forced US steel prices to rise higher than expected.

The full list of exclusions is on the US Trade Representative's web site (see link above).