WTO says Trump’s steel tariffs violated global trade rules

“The position of the United States, for over 70 years, has been clear and unequivocal that issues of national security cannot be reviewed in dispute settlement in the WTO and the WTO has no authority to second-guess the ability of a WTO member respond to a wide range. -a range of threats to its security,” he said.

The ruling from a panel group reviewing the situation suggests that the United States must “stand idly by” while China and other countries flood their market with steel and aluminum produced with generous amounts of government support, Hodge said. “The United States will not submit decision-making regarding its essential security to WTO panels,” he said.

Four WTO dispute settlement panels, each with the same people, issued rulings in cases brought by China, Norway, Switzerland and Turkey. Two more challenges by Russia and India are still pending.

“I think this ruling sends a shock wave into the system” since members have long been at odds over what constitutes a national security threat, said Wendy Cutler, a former senior trade official. of the US is now Asian Society Policy. Institution.

The United Steelworkers union and the American Iron and Steel Institute, an industry group, also contested the decision.

“The United States cannot trade our national security. We must maintain these relief measures and reject the misguided efforts of WTO lawyers,” Steelworkers President Tom Conway said in a statement.

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The challenging American position comes at a time when huge new subsidies for green technologies have been provided by the The Inflation Reduction Act raising new concerns about US commitment to the rules-based global trading system.

Trump sparked the dispute when he scrapped a rarely used trade provision – Section 232 of the Trade Expansion Act 1962 — restrict steel and aluminum imports from around the world on the grounds that they threaten two industries vital to US national security.

Trading partners saw the move as a thinly veiled protectionist measure and quickly prepared to challenge the action at the WTO. Many members, such as the European Union and China, have also imposed tariffs on American goods.

Article 21 of the WTO’s basic document, the General Agreement on Tariffs and Trade, allows members to act in violation of WTO commitments to treat trading partners equally if for the purposes of protecting national security.

However, it also places restrictions on when it can be used. Two cases he specifically mentions are cases related to material for the construction of nuclear weapons or arms trafficking for the purpose of supplying a military establishment.

A third, more general exception allows countries to invoke Article 21 “in time of war or other emergency in international relations.” That was the Trump administration’s defense.

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However, the WTO panels responsible for reviewing the matter decided that Trump’s tariffs were not imposed during a time of war or other emergency in international relations, and therefore he could not invoke the national security exception to his commitments to break trade.

That is a major blow to the long-standing US position — and the view held by many other members — that such actions are “self-judgment,” meaning that if a member decides that trade activity is in the interest of its national security, it would others should and should not agree. it’s a challenge.

However, many believed that Trump’s steel and aluminum actions had so greatly expanded the definition of what constitutes a national security threat that they could not be countered.

These included the EU, Canada and Mexico, as well as China, Norway, Switzerland, Turkey, Russia and India. Canada and Mexico reached an agreement with the United States in 2020 as part of the Trump administration’s efforts to secure congressional approval of the US-Mexico-Canada Agreement to succeed NAFTA.

The Biden administration also made a deal with the EU in 2021 to resolve the dispute and subsequent arrangements were made with the UK and Japan.

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The “self-judgment” approach worked well when countries were using the national security exception in narrow ways, but the world has changed since then, Cutler said. She blamed China for starting the trend by manipulating the internet and other economic sectors for reasons of national security.

The four years it took the WTO to rule on the issue shows the sensitivity of the concern and the stress on the organization’s dispute settlement system.

Additionally, the Trump administration has completely shut down the WTO Appellate Body by blocking the appointment of new judges because it believes many of its decisions were wrong. That now enables him to appeal Friday’s lower panel rulings “in a vacuum” to prevent them from being formally adopted.

More decisions stemming from Trump’s steel and aluminum action are to come.

The Trump administration has filed countercomplaints challenging the countermeasures imposed by a long list of nations. The settlements with Canada, Mexico and the EU resolved those cases, while others involving China, Russia, India and Turkey are still pending.

The issue in those cases is whether the countries were legally entitled to unilaterally retaliate against Trump’s measures, or whether they should take the much longer route of formally challenging the tariffs through the WTO’s dispute settlement system .

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