The European Union (EU) has published a list of American goods which could become targets for sanctions in the biggest transatlantic trade war in history.

Target list

Nuclear reactor parts Boiled sweets Wheat gluten Millet Buckwheat Chewing gum Raw cane sugar

The EU won the right to impose sanctions worth $4bn (�2.5bn) two weeks ago, after the World Trade Organisation (WTO) ruled that a US tax break for exporters amounted to a massive illegal subsidy for exporters.

The target list ranges from nuclear reactor parts to chewing gum and farm products like cereals, wheat gluten, nuts and vegetables.

If US companies are to avoid the sanctions, the Bush Administration must persuade Congress to approve an unpopular change to the tax laws - a contentious issue in the run-up to mid-term elections for Congress in November.

'Like a nuclear attack'

The publication of the list was a "double-edged sword" that would backfire on the EU by focusing European firms on the likely cost to themselves, a spokesman for the Office of the US Trade Representative has said.

The WTO approved the sanctions - the biggest yet by far - after the EU claimed the tax break was costing European companies billions of dollars in lost trade.

But Robert Zoellick, the US Trade Representative, has warned that if the EU imposed the sanctions, it would be detonating a nuclear bomb in the world trading system.

The European Commission hopes it will not come to that, according to the BBC's Europe Business Correspondent, Patrick Bartlett.

By publishing the sanctions list, the EU wants to keep maximum pressure on the US to change the offending legislation, he says.

Final list

The target list contains $14bn of US goods. It will be fine-tuned in talks with European businesses over the next 60-days before the Commission submits its final list to the WTO.

President Bush has promised reform but Congress, under heavy lobbying from US corporations, is still hostile.

Lawmakers from the US president's own Republican Party have opposed abolishing the tax break for firms who sell goods abroad.

The US is also threatened with EU sanctions in another, global trade dispute over its decision to raise tariffs on steel imports.

Steel firms are important employers in many mid-Western districts where the Republicans are defending narrow majorities in the November Congressional poll.

The huge sanctions agreed by the global trade umpire as a penalty for the tax break were in line with the EU's calculations.

They represented a spectacular defeat for the US.

It had argued to the WTO that the financial benefit to US companies from the tax break was in the region of $1bn.

However, European firms could face higher costs for US imports if the sanctions go ahead.

A spokesman for Eurocommerce, a retail industry lobby group has said that, although it was important to retaliate to oppose US "unilateralism" in trade matters, it was "not tolerable that the commerce sector in Europe is caused any harm".

To prevent "excessive harm" to European firms, the Commission has picked products where the US supplies less than 20% of European imports, said EU spokeswoman Arancha Gonzalez.