The formal finding was released in Geneva by a panel that looked into a complaint filed by the European Union, Japan and six other countries. The US is expected to go on appeal
The WTO panel said the tariffs had been introduced without proper justification. The tariffs were up to 30 percent on top of normal duties and spearheaded by Bush as a legal measure to protect the ailing US steel industry from a flood of imports.
The action, which the US had argued was allowed under the WTO Safeguards Agreement, would have to be changed in tune with the trade body’s rule-book, the panel added.
Bush is under heavy pressure from steel manufacturers and worker unions to keep the hefty tariffs for as long as possible.
US importers and manufacturers of consumer goods using steel products welcomed the WTO’s interim finding, saying the tariffs had pushed up their costs and were driving thousands out of work to help inefficient steelmakers.
In Brussels, the European Commission hailed the decision as a total victory and said the bloc had drawn up a list of goods worth around $2.0 billion that could face sanctions if Washington did not withdraw the tariffs five days after an initial WTO ruling or five days after it lost an appeal.
An interim ruling four months earlier also went against the US. That ruling was delivered to Washington, Brussels, Tokyo and the capitals of the other countries that joined the case against the US in March, a year after the tariffs were introduced.