The European Union began a seven-day countdown on Monday before it slaps $200 million of sanctions on US goods as a long-running trade fight comes to a head, EU diplomats said.
EU industry has expressed fears of the prospect of a transatlantic trade war, but the initial impact of the sanctions on business is seen as limited, as they represent a small share of the billion-dollar-a-day EU-US trade flows.
The two sides have also lived calmly for several years with more than $100 million of US sanctions on EU goods.
"At this stage people are resigned to the fact that they (sanctions) will start on March 1," said one EU trade official.
"There will always be a time when it is bad to impose sanctions, but we have to draw a line in the sand somewhere," added a trade diplomat from an EU member state.
The EU has aimed its sanctions at a wide range of US goods, ranging from cereals like buckwheat to parts for nuclear reactors and electric toy cars.
The $200 million is a fraction of the $4.0 billion's worth of goods the EU could have hit with sanctions after it won a World Trade Organisation (WTO) dispute against Washington over US export tax breaks called the Foreign Sales Corporation (FSC).
The aim of the sanctions is not to hurt EU importers, but to penalise US manufacturers and put pressure on Congress to repeal the FSC system and comply with the WTO's ruling.
Lamy last week said the size of the sanctions did not amount to a trade war. Under an EU regulation passed last year, the sanctions will rise by one percent a month to reach 17 percent from March 1 next year, gradually increasing the pressure.
European industry group UNICE, worried about a trade dispute just as the EU economy recovers from a downturn, last week asked Lamy to consider giving a concession to the United States by allowing a phase-in period for the system to replace FSC.
Other lobbies are worried as well. "We don't welcome it's got this far but have to accept it," said Claudia Woermann, foreign trade expert at Germany's BDI industry federation.
"The point is that these sanctions are completely in line with the WTO; the EU is acting logically from a WTO point of view, but it's a shame we have got into this situation."
Congress still has a long way to go before presenting any legislation. Neither the Senate nor the House of Representatives has produced a draft bill, a final version of which would be a compromise between the two sides of Congress.
As well as EU business, US firms want a swift resolution to the fight, although a sliding dollar has taken some of the pressure off lawmakers by making exports more competitive.
"AmCham Germany as well as other European AmChams encourage the United States Congress to comply as quickly as possible with the WTO ruling," said the American Chambers of Commerce in Germany and the BritishAmerican Business Inc in a statement.
AmCham Germany spokesman James Ryan Anderson hoped both sides would focus on limiting the damage if, as expected, new US legislation included a transition period.
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