USTR Says Retaliatory Tariffs Are Illegal, Brings WTO Cases

The retaliatory tariffs from the European Union, China, Canada, Mexico and Turkey in response to U.S. steel and aluminum tariffs are being challenged at the World Trade Organization by the Office of the U.S. Trade Representative. "The U.S. steel and aluminum duties imposed by President Trump earlier this year are justified under international agreements the United States and its trading partners have approved," the USTR said in a July 16 news release. "However, retaliatory duties on U.S. exports imposed by China, the EU, Canada, Mexico and Turkey are completely without justification under international rules.

The EU and other countries say that the national security justification for the tariffs is a cover, and the tariffs are really safeguards. In response, those countries imposed similarly sized tariffs, as is customary for safeguards. But in order for safeguard tariffs to be legal, the WTO must approve them first, and none of the parties waited for permission (see 1806290049). “The actions taken by the President are wholly legitimate and fully justified as a matter of U.S. law and international trade rules. 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," USTR Robert Lighthizer said.

Lighthizer said the "tariffs appear to breach each WTO Member’s commitments under the WTO Agreement." The U.S. "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," he said. Previously, China, the EU, Canada, Mexico, Norway, India, Russia and Switzerland filed cases at the WTO saying that the Section 232 tariffs violated international law. Switzerland just filed its case on July 12.