Europe, US escalate trade war on tariffs
The requests will be considered at the next meeting of the WTO for dispute settlement
China and the EU have joined a group of countries asking the World Trade Organisation (WTO) to investigate the Trump administration’s decision to impose metals tariffs, on national security grounds. In a separate filing, the US asked the WTO to review those nations that retaliated against its duties.
The move sets the stage for a showdown at the Genevabased trade arbiter that some fear could either lead to a US exit or a flood of new protectionist measures invoking what has until now been a rarely used national security loophole in global trade rules. The US has said the tariffs on imported steel and aluminium imposed earlier this year are allowed under the WTO’s national security exemption, which permits governments to take “any action which it considers necessary for the protection of its essential security interests.”
This has drawn the ire of those affected, many of which are close American allies, such as the European Union and Canada. So far, Canada, China, the EU, Mexico, Russia and Turkey have imposed retaliatory tariffs on more than $25 billion (Dh91 billion) worth of US goods.
The dispute puts the trade organisation in a difficult position: If it rules in support of the US, it could encourage other members to enact protectionist measures. If it rules against the US, it could draw further ire from the world’s largest economy and a possible withdrawal by the Trump administration.
Metals tariffs
The requests will be considered at the next meeting of the WTO dispute settlement body, scheduled for October 29.
Nine WTO members — Canada, China, the EU, India, Mexico, Norway, Russia, Switzerland and Turkey — have filed initial complaints that allege Trump’s tariffs on steel and aluminium violated WTO rules. But Thursday’s move takes the disputes an important step closer to a formal case.
In July, the US said its tariffs were authorised under Section 232 of the US Trade Expansion Act of 1962 — which permits the president to impose trade restrictions if imports are found to harm US national security.