WTO Rules against Donald Trump’s Metal Tariffs in Challenge Brought by China and other Countries

· The International Body says the Duties on Steel and Aluminium Imports Breach Global Trading Rules

· “We do not intend to remove the Section 232 duties as a result of these disputes,” US said, adding the panel report reinforced the need for WTO reform.

· China says it hopes the US will respect the Panel Ruling and ‘Correct its Wrongful Conducts as soon as possible’

· Trump imposed 25 per cent tariffs on steel imports and 10 per cent on aluminium from several countries and territories including Hong Kong in 2018, using Section 232 of a 1962 act that allows the president to restrict imports if they are threatening national security. Free trade partners Canada and Mexico were later exempted.

The World Trade Organization ruled on Friday that US tariffs imposed on steel and aluminium imports by then President Donald Trump contravened global trading rules in a judgment immediately criticised by Washington.

In one of the most high-profile and potentially explosive cases to come to the WTO, the three-person adjudicating panel said the US measures were inconsistent with WTO rules and recommended the United States bring them into conformity.

The United States said it strongly rejected the “flawed” interpretation and conclusions of the panel.

It could appeal the ruling, which would send it into a legal void because Washington has blocked appointments to the WTO Appellate Body, rendering it incapable of giving a judgment.

China said it hoped the United States would respect the panel ruling and “correct its wrongful conducts as soon as possible”.

The Office of the US Trade Representative said in a statement that the United States would not “stand idly by” while Chinese overcapacity posed a threat to its steel and aluminium sectors and its national security.

“The WTO has proven ineffective at stopping severe and persistent non-market excess capacity from the PRC and others that is an existential threat to market-oriented steel and aluminium sectors and a threat to US national security,” the statement said, referring to the People’s Republic of China.

The US steel sector also criticised the WTO panel, the Steel Manufacturers Association saying it supported the government’s refusal to accept its conclusions.

The Hong Kong government on Saturday welcomed the ruling, saying it “clearly showed that the US has abused the concept of national security with the sole aim to politicise economic and trade issues.”

Trump imposed 25 per cent tariffs on steel imports and 10 per cent on aluminium from several countries and territories including Hong Kong in 2018, using Section 232 of a 1962 act that allows the president to restrict imports if they are threatening national security. Free trade partners Canada and Mexico were later exempted.

The tariffs prompted several WTO members including China to challenge the measure and on Friday, a three-person WTO panel issued its findings in the cases brought by China, Norway, Switzerland and Turkey. Cases brought by India and Russia are still pending.

Washington last year agreed to remove tariffs on EU imports, prompting Brussels to suspend the EU case.

The administration of President Joe Biden has otherwise kept in place the metals tariffs that were one of the centrepieces of Trump’s America First strategy.

Trump’s protectionist campaign promise: trade tariffs on steel and aluminium imports approved

The case hinged on the exemption from global trade rules the WTO allows in cases of national security.

The central US argument was that national security is for countries themselves to judge and certainly not something to be assessed by three WTO adjudicators sitting in Geneva.

Complainant Switzerland said the finding did not call into question the right of WTO members to take measures to protect security with broad discretion, but they did have to meet certain minimum requirements that could be examined at the WTO.

The US and the EU are said to be considering new tariffs on Chinese steel and aluminium as part of a broader bid to fight carbon emissions. That’s a change from the Trump administration’s reliance on the WTO’s national-security loophole in favour of another WTO exception for trade restrictions imposed in the name of protecting the environment.