Geneva ? An appeals panel ruled Monday that U.S. duties on imported steel introduced last year were illegal, and the European Union was threatening to retaliate with $2.2 billion in sanctions unless Washington swiftly lifts the tariffs.

The White House quickly disputed the decision by the World Trade Organization panel, which rejected the bulk of the U.S. appeal seeking to strike down a July ruling that the duties break WTO rules.

“We disagree with the overall WTO report and we are going to study it and look at its implications and go from there,” White House press secretary Scott McClellan said. “We believe (the duties) are fully consistent with WTO rules.”

He would not offer a timetable for a White House decision.

The WTO issued its initial July ruling after a complaint from the 15-member European Union and seven other nations. In a joint statement Monday, those nations said Washington had “no other choice” but to remove the import duties without delay.

European Union trade chief Pascal Lamy said the EU could impose sanctions on U.S. imports within weeks if Washington failed to drop the duties. Other countries also could join in.

The EU is threatening to impose up to $2.2 billion of sanctions on U.S. imports — ranging from cigarettes to frozen vegetables to paper products — by introducing 100 percent duties, effectively pricing the goods out of the EU market.

When his administration introduced the three-year duties of up to 30 percent in March of last year, President Bush claimed they were justified to protect domestic steel producers during a period of restructuring.

The appeals panel upheld the major findings of the July report that said the United States failed to prove that its industry had been harmed by a sudden flood of cheap imports — a condition for imposing such duties under WTO rules.

A coil of steel is loaded on the Federal St. Laurent at the Port of Cleveland for shipment to Spain in this April 22 photo. U.S. duties on imported steel introduced last year are illegal under international trade rules, a World Trade Organization appeals panel ruled Monday.