US Unlikely to Avoid EU Trade Sanctions in Tax Case

[Khephra]

WASHINGTON (Reuters) - Amid election-year worries about manufacturing job losses, U.S. lawmakers are unlikely to repeal export tax subsidies that violate global trade rules in time to avoid punitive European Union trade sanctions on billions of dollars of U.S. goods.

Senate Majority Leader Bill Frist said he would like to pass legislation that repeals the tax subsidies by the March 1 deadline set by the EU. But lawmakers are set to leave for a weeklong break on Friday, leaving them little time after they come back to enact legislation before the deadline.

"Everybody knows we have a deadline," said Frist, a Tennessee Republican. "I would like very much to be able to do it by March 1. I can't commit to it."

A weak dollar that has made U.S. goods cheaper in international markets may be taking some of the pressure off of lawmakers, congressional aides and industry sources said. But at some point, the punitive tariffs the EU will start imposing on goods imported from the United States will cause financial pain to U.S. companies, they said.

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