Peter Mandelson, the European commissioner, has fired the first salvo in a potential transatlantic trade war by agreeing to challenge the US over its biofuel subsidies, which are chasing British and continental firms out of business.

Confidential documents seen by the Guardian show that Mandelson and the European commission have put their signatures to anti-dumping complaints lodged by the European Biodiesel Board.

Washington will be asked this week to answer allegations that subsidies amounting to 11p a litre on B99 exports from the US, plus "splash-and-dash" operations being conducted through the US, represent unfair competition. ... Read full article