"Retaliation is not our preferred option, but it is a necessary action. International trade rules must be respected," said Canada's Trade Minister Jim Peterson in a statement released in Ottawa.

Brussels and Ottawa said they opted for the duties because of Washington's failure to fix a programme known as the Byrd amendment which the World Trade Organisation has said is illegal.

The WTO gave permission to the EU, Canada, Japan and several other trading partners in November to apply an initial $150 million in trade sanctions after Washington failed to change the Byrd amendment to comply with WTO rules.

The programme, which is named for Democratic Sen. Robert Byrd of West Virginia, distributes anti-dumping duties to US companies that initially sought government protection because of low priced foreign competition.

Under the amendment, the US government has doled out more than $1 billion to US ball bearing, steel, seafood, candle and other companies over the past four years.

US officials in Washington said they were disappointed with the EU and Canada's decision to go ahead with sanctions.

"The United States is working to comply with the WTO decision regarding the Byrd amendment," said Richard Mills, a spokesman for the US Trade Representative's office.

Senate Finance Committee Chairman Charles Grassley, an Iowa Republican whose panel has jurisdiction on trade issues, said he hoped Congress could reach "a consensus soon on the Byrd amendment that will enable us to avoid continued trade sanctions."