The fresh produce trade has been dragged into an ugly fracas caused by the US president placing 15-25 per cent tariffs on UK steel, after which the EU vowed to retaliate.

In a statement this week, the EU revealed the fight–back involved a long list of US exports – including apples – that would be subject to a crippling 100 per cent import duty unless Bush removed steel tariffs by June 18.

Germany and the UK had feared any action could be damaging at a time when the world economy is struggling. But UK trade secretary Patricia Hewitt formulated a deal to back the retaliatory action as long as the EU agreed to reprieve Florida citrus – long rumoured to be under threat.

Nevertheless, US apples remain part of the cross–ocean conflict and Washington Apple Commission spokesman George Smith spoke of his concern for both US and UK businesses.

He said: 'If it goes ahead, it will seriously damage us. There are packhouses in Lincolnshire that are supported by the US, so it's going to have an impact because they are not going to be able to pay their staff. It is a desperate situation. It's the little guy that's going to suffer from this.' Smith was dismayed that citrus had been given a reprieve – the EU cannot satisfy demand for either pigmented grapefruit or not-from-concentrate juice – when apples had not, and suggested that continental Europe was making the most of the dispute.

He said: 'We have no friends in France and Belgium – they have been trying to stuff the US and this is the ideal thing to them – but we are not in competition with UK growers and we are being tarred with a very big brush. Certain products have got preferential treatment – we [the EU] don't produce citrus, but we do do apples, and if there were no Washington Pinks or Reds the consumer wouldn't really miss them.' However, Smith was hopeful the situation could be resolved before the deadline, and said: 'We are a long way from it yet. The Bush administration and the EU have to have more talks.' Speaking on behalf of the FPC importers division, Douglas Pattie agreed with Smith that France and Italy may be able to meet demand.

He said: 'I would have thought there will be apples available – French or Italian stocks possibly – given that they are in structural oversupply in the EU.' Pattie said Europe's move required council agreement on June 10, and that the department of trade and industry (DTI) would only press ahead if the US 'refused to give ground'.

He said: 'It's more harmful to produce companies in this country than in the US. There are a number of companies that are involved in US apples – Empire and Red Delicious – they are a very important product for the supermarkets at this time of year.' And with negotiations said to be 'continuing at a very high level', an agriculture spokeswoman for the US embassy said: 'A 100 per cent duty on any product would definitely be harmful, so it is worrying. We have still got a month or so to go though, so I'm hopeful.' She appealed to UK business to help free apples from the list of targets. Asked whether the commodity had a chance of avoiding the action she said: 'I would think that depends on UK importers as well as the UK retailers that would also be damaged, and how well they are able to convey that across. Pink grapefruit was probably removed because it would have increased costs for UK consumers.'

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