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US Challenges Allies, China at WTO for Retaliating Against Metal Tariffs

July 17, 2018
The U.S. Trade Representative said the U.S. would take “all necessary actions” to protect U.S. interests and urged trading partners to “work constructively” with the Trump administration to address overcapacity in both metal sectors.

The Trump administration is hitting back at what it considers unjustified retaliatory tariffs that were imposed in response to U.S. steel and aluminum duties.

The U.S. Trade Representative said it launched formal challenges at the World Trade Organization on Monday against China, the European Union, Canada, Mexico and Turkey for retaliating against steel and aluminum tariffs. The Trump administration earlier this year imposed 10% duties on aluminum and 25% on steel after finding imports of the metals pose a risk to national security.

“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.,” U.S. Trade Representative Robert Lighthizer said in a statement.

Lighthizer said the U.S. would take “all necessary actions” to protect U.S. interests and urged trading partners to “work constructively” with the Trump administration to address overcapacity in both metal sectors.

Canada, China, the EU, Mexico and Turkey have imposed retaliatory tariffs on $23.4 billion worth of U.S. goods in response to Trump’s tariffs on steel and aluminum.

EU Opposition

A European Commission spokesman said that while the bloc’s decision to retaliate was proportionate and WTO-compatible, the U.S. is entitled to seek an independent review in which the European Union will explain and defend its position.

The Canadian government said its tit-for-tat tariffs are allowed under the rules of the WTO and North American Free Trade Agreement. “The tariffs imposed by the United States on Canadian steel and aluminum are unacceptable and illegal,” Adam Austen, the spokesman for Foreign Minister Chrystia Freeland, said in an emailed statement on Monday.

The Mexican government said in a statement that it will look at the U.S. request with the goal of answering it in the next 10 days. The U.S.’s national-security rationale for its steel and aluminum tariffs was unjustified, according to the statement, and Mexico’s response was a reaction to that. The Mexican government promised to continue to defend its national interest.

The Trump administration has criticized the WTO for encroaching on U.S. legal sovereignty and failing to rein in China’s alleged violation of global trading rules. Trump himself threatened to take action against the WTO earlier this month after Axios, a news service, reported that his administration had drafted legislation to withdraw the U.S. from the organization, a move the president repeatedly told advisers he was considering.

The WTO has “not worked well, or not as well as it was intended to work when China was brought into the WTO in the year 2000,” Treasury Undersecretary for International Affairs David Malpass said at an event in Washington on Monday.

The U.S. wins 87% of the cases it brings to the WTO against other countries and loses 75% of the cases other countries bring against Washington, according to a Bloomberg analysis of the 524 cases lodged at the Geneva-based organization since it was founded in 1995 as the successor to the General Agreement on Tariffs and Trade. Both figures are better than the average for all nations.

By Jenny Leonard

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