The trade dispute between the European Union and the US was caused by ______.

The European Union has drafted a list of US products to be hit with import taxes in retaliation for tariffs the US has imposed on European steel. EU member governments will review the list before the EU submits it to the World Trade Organization which arbitrates international trade disputes. EU officials will not say which American products will be hit by the EU sanctions. But diplomats monitoring the most recent trans Atlantic trade dispute say they include textiles and steel products. Earlier this month, the Bush administration imposed tariffs of about 30% on some steel imports including European products. The EU has appealed to the WTO to get those duties verturned. But the WTO decision on the matter will take up to a year or more. EU officials say that under WTO rules, the EU has the right to impose retaliatory measures in June, but they say the US can avoid the EU’s possible counter-measures if it pays more than 2 billion dollars in compensation to the EU for imposing the steel tariffs in the first place. The officials say Washington could also escape retaliation by lowering US import duties on other EU products. The Bush administration says it will not pay compensation.