Defiant Prodi Warns of Us Rift

Romano Prodi, the president of the European commission, yesterday warned Washington not to try to dictate the EU's economic and political agenda, and appealed to President George Bush to pull back from the brink of a full-blown transatlantic trade war on steel.

In an unusually robust outburst that coincided with the commission formally adopting its own defensive tariffs on imported steel, Mr Prodi stressed that Europe would defy Washington in a variety of policy areas. It would not tolerate US protectionism on steel, he said, and would take on Washington over the Kyoto agreement and press ahead with a £2bn satellite navigation system which has alarmed the Pentagon.

"It is about Europe standing on its own feet and not letting someone else dictate our agenda," he said.

He added that he was surprised by Washington's decision to impose tariffs of up to 30% on steel imports. "I appeal to President Bush and his administration not to proceed any further down this path," he said.

Although he did his best to play down the EU's increasingly rancorous relations with Washington over steel, Mr Prodi conceded that the situation could get worse.

His comments came as the commission adopted tariffs of up to 26% on foreign steel to discourage cheap imports shut out of American markets.

The action was necessary, the commission said, because the US tariffs were "unfounded, unnecessary and unfair". Washington has so far dismissed calls for it to compensate EU producers for $2bn a year in lost sales, raising the prospect of a full-scale trade war.

Mr Prodi signalled separately that the EU was in the dark about what military action the US intended to take against Iraq, and had serious reservations about targeting Saddam Hussein, he told the New Statesman magazine. "We have no information on Iraq," he said. "I worry about enlargement of the conflict to any other country. We need ... a clear picture of the goal."