YESTERDAY the inauguration; today, the first big row. President Bush’s procession down from a frozen Capitol Hill at the formal start of his second term displayed all the smooth confidence he has shown since re-election, even if it lacked some of the buzz of a new president’s first ceremony.

But behind him, on the Hill, a long, sour wrangle has suddenly come to a head, over the European Union’s new year determination to lift an embargo on selling arms to China.

The sting is that, in a change of position, Britain now backs the EU, not the US. Never mind the British presence in Iraq; the shift has been taken in the White House as an unexpected rebuff, and on Capitol Hill, as outright treachery. The row sounds like a small-scale trade dispute — and it is exactly that, from most perspectives. But Congress, even more than the Bush Administration, has been anything but calm.

The danger is that Congress may force the US to pick a fight with the EU — and may even try to punish Britain by curbing its own arms deals with the US. The result is a shadow over Mr Bush’s much-trumpeted mission to Europe next month to patch up differences.

The EU suspended arms exports to China after the military crackdown on pro-democracy demonstrators in Tiananmen Square in 1989.

But in the past few years, the French and German governments, in particular, have been determined to see this lifted and in December, they said that they planned to go ahead. That has been another point of aggravation between them and the US, even if it has been dwarfed by Iraq.

The Bush Administration dislikes the notion of strengthening China’s military capability, particularly given the tension over Taiwan. It has not been shy in saying so.

“We can’t countenance the notion of advanced European weapons technology finding its way into the People’s Army and threatening our forces in the region, or in Taiwan,” a US government official told The Times last month. “It is very close to the bone for us”.

But the Administration has been saved the embarrassment of fighting this point before Mr Bush’s “peacemaking” European tour next month by the strength of feeling in Congress.

In this transatlantic row, it is Capitol Hill doing much of the running. Last month, 25 members of the House of Representatives wrote to Jan Peter Balkenende, the Dutch Prime Minister, to express their hostility.

The potential heat of this row was shown yesterday by Japan entering the fray. Jack Straw, the Foreign Secretary, in Tokyo on his way to Beijing, was told by Nobutaka Machimura, his counterpart, that Japan furiously opposed the lifting of the embargo.

Mr Straw offered a sop; British troops will help to defend Japan’s 600 Self-Defence Forces in Iraq, who are there for humanitarian purposes, and not supposed to engage in aggressive warfare.

But that cannot do much to soothe Japan’s sense of grievance. Its relations with China are particularly tense after months of territorial squabbles.

The new bitterness — and complexity — has come from the shift in Britain’s position. Until last year, it was carefully equivocal, but more on the US side. Now, it backs the EU.

Mr Blair’s officials have worked hard to say that the row is a storm about nothing: that lifting the embargo will not result in sales of important technology to China, or even a great increase in sales. Last November, two days after Mr Bush’s re-election, he said in an interview with The Times that he was confident that the dispute with the US could be “resolved” and that “there is a case for lifting, but we need to do it in a careful and measured way”.

But that has not been accepted in Washington. There are now threats in Congress that the US will refuse to sell new military technology to EU countries — including Britain — if they scrap the embargo.

That touches on what is a sore point between Britain and the US. Even though Britain has backed the US over the Iraq war, a small band in the House of Representatives have refused to give Britain a waiver from the International Traffic in Arms Regulations, part of a piece of legislation from 1976, which curtails its ability to buy from the US.

Two congressmen are leading the battle: Henry Hyde, of Illinois, chairman of the International Relations Committee, and Duncan Hunter, of California, chairman of the Armed Services panel.

For President Bush, the bad news is that it may cloud his European trip. The good news is that he can pin the blame on Congress for a fight that he might otherwise have felt obliged to pick himself.

EU EMBARGO

America might halt arms sales to Europe by way of reprisal

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