Trade Cases

U.S. Challenges Retaliatory Tariffs at WTO

Written by Sandy Williams

The United States shot back at allies and China who have filed World Trade Organization disputes against Section 232 steel and aluminum tariffs. On Monday, the U.S. Trade Representative filed five claims with the WTO challenging retaliatory tariffs launched by China, the EU, Canada, Mexico and Turkey.

The tariffs of 10 percent on aluminum imports and 25 percent on steel imports imposed under Section 232 are “justified under international agreements the United States and its trading partners have approved” according to the USITC press release, but the retaliatory duties on U.S. exports “are completely without justification.”

“The actions taken by the president are wholly legitimate and fully justified as a matter of U.S. law and international trade rules,” said U.S. Trade Representative Robert Lighthizer. “Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies.”

“These tariffs appear to breach each WTO Member’s commitments under the WTO Agreement,” added Lighthizer. “The United States will take all necessary actions to protect our interests, and we urge our trading partners to work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors.”

The tariffs being challenged include:

  • China–15 to 25 percent additional duties on $3.0 billion in U.S. imports
  • European Union–Tier 1 duties of 10-25 percent on $3.2 billion in U.S. imports, and Tier 2 duties of 10-50 percent on $4.2 billion of imports
  • Turkey–4 to 70 percent additional duties on $1.8 billion in U.S. imports
  • Canada–10 to 25 percent duties on $12.7 billion in U.S. imports
  • Mexico–7 to 25 percent duties on $3.6 billion in U.S. imports

The U.S. maintains that measures taken to protect national security are not subject to review by the WTO under GATT Article XXI. U.S. allies say there is no justification for using national security measures to limit or tariff their steel and aluminum imports.

An EU spokesperson responding to the U.S. action said, “Our decision to impose rebalancing duties in reaction to the U.S. measures on steel and aluminum is proportionate and WTO-compatible. The U.S. is, of course, entitled to seek independent review of this question in the WTO dispute settlement system, and we will constructively enter into the requested consultations with the U.S. at the WTO, where we will explain and defend our position.”

Canadian Foreign Affairs Minister Chrystia Freeland’s office reiterated Canada’s criticism of the U.S. tariffs on Monday. “The tariffs imposed by the United States on Canadian steel and aluminum are unacceptable and illegal,” spokesperson Adam Austen said. “As Minister Freeland has said repeatedly, it is absurd to view any trade with Canada as a national security threat to the U.S.”

The five WTO nations named have 10 days to respond to the U.S. and 30 days to enter into consultations. If any disputes are not settled within 60 days, the U.S. may request a dispute settlement panel, which a WTO member may block only one time.

Commerce Secretary Wilbur Ross claimed in an opinion article last week that the Section 232 tariffs are necessary to keep domestic mills commercially viable to supply the U.S. military and U.S. industry with the metals necessary for defense and infrastructure. The tariffs are beginning to work, said Ross, citing nine major investments at previously shuttered steel and aluminum plants.

“One thing is clear: The remarkable revitalization of American’s metal industries would not be happening without President Trump’s Section 232 tariffs,” said Ross. “Despite objections over the Section 232 tariffs from foreign producers and governments, the tariffs are on track to accomplish what they were intended to do. They are helping re-establish two vital industries for our national security.”

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