Trump’s steel tariffs violated WTO regulations

• WTO decides that US tariffs on steel and aluminum imports violate global trade rules.
• Mr. Trump invoked national security reasons.
• He unveiled increased border levies in 2018.

WTO decides that US tariffs on steel and aluminum imports violate global trade rules.

Mr. Trump invoked national security reasons when he unveiled increased border levies in 2018, prompting global trade disputes.

The WTO said the levies did not come “during war or another emergency.”

The US defended tariffs.

Assistant US trade representative Adam Hodge said the US “strongly disagrees” with the verdict and won’t remove the restrictions.

“The Biden administration is committed to safeguarding US national security by ensuring the long-term survival of our steel and aluminum industry,” he stated.

“The United States has held for over 70 years that questions of national security cannot be examined in WTO dispute settlement,” he added. “The WTO has no jurisdiction to second-guess a WTO member’s ability to respond to a wide range of security concerns.”

China, Norway, Switzerland, and Turkey filed lawsuits.

WTO said US trade policies should be compliant. If the US doesn’t follow the judgment, the countries who complained can levy retaliatory tariffs.

The US can appeal. The US has blocked appointments to the WTO’s appellate court for years, preventing it from functioning.

China said it hoped the US would accept the verdict and reform its practices “as soon as possible.” Switzerland’s economic affairs secretariat said the WTO report reaffirmed countries have extensive discretion to defend security interests “given they meet certain minimal conditions.”

Norway’s foreign ministry didn’t comment on further moves. It claimed it brought the case to “avoid protectionism” and “defend the rules-based, multilateral economic system.”

Trade experts said the issue was important for its ramifications on the unstable global trade consensus.

“With geopolitical tensions rising, governments are more likely to activate the national security exception,” says Chad Bown of the Peterson Institute for International Economics (PIIE).

This verdict affects members’ future policy and WTO support.

Trump implemented 25% steel and 10% aluminum tariffs in 2018, citing unfair competition and national security.

The charges, endorsed by US steelworker unions, have been softened dramatically from what was first stated when even shipments from close allies in North America were at risk.

Mr. Trump inked arrangements exempting some countries from tariffs or allowing certain imports.

The Biden administration achieved similar arrangements with the EU, Japan, and the UK to improve relations with friends, but kept tariffs for other countries.

Though the duties infuriated allies and worried US firms that use metals about increasing costs, the US said they were directed largely at China, which has been accused of selling its steel abroad for below-market pricing due to unfair government subsidies.

The US trade envoy submitted to the EU a plan to alter the global steel and aluminum market this week.

Promote commerce in metals made with minimal carbon emissions and apply tariffs on polluting metals.

While the plan’s contents haven’t been released, it’s likely that China will incur levies when selling metals to signatory countries.

The trade war between the US and China, precipitated in part by metals tariffs, has had lasting ramifications.

Trump and Xi Jinping’s announcement of a 2020 trade pact helped calm public anxiety.

According to the PIIE, approximately two-thirds of China’s exports to the US and 58% of US exports to China are subject to extra tariffs.

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