James Bacchus explains a possible WTO Case Against U.S. Steel and Aluminium Tariffs
As reported by Alex Lawson, Law360
The Trump administration’s tariffs on steel and aluminium imports could violate core WTO procedural ruling.
Following the Trump administration’s announcement to implement tariffs on steel and aluminium imports, James Bacchus, former congressman and World Trade Organisation (WTO) Appellate Body judge tells Alex Lawson, Law 360 that the law used to justify the tariffs is Section 232 of the Trade Expansion Act – a Cold War-era national security law that has not been used to impose trade restriction since before the WTO was established.
Although the U.S. has exempted the European Union (EU), Mexico, and Canada from the tariffs, any tariffs imposed under Section 232 could be considered a violation of one of the WTO’s core procedural rules.
Bacchus also explains that all WTO members are required to ask the organisation for a ruling on a potential violation before imposing any trade remedies. “This means that the application of these tariffs on steel and aluminium under Section 232 without first going to the WTO dispute settlement system is in and of itself a violation of the WTO obligations of the United States,” he states
Additionally, while tariffs have been enacted on the basis of national security concerns, Trump and his advisors appear to make an entirely economic case for the duties, using the tariffs to shield U.S. steel and aluminium producers from foreign competition.
In the end, Bacchus agrees that the matter will ultimately go before a WTO panel, resulting in a rule that the U.S. is not eligible for the security exception, or that countries can diagnose their own security risks and allow tariffs to stand. Should the outcome result in the latter, the door for a trade war would ostensibly be open.
The full interview can be read at Law360 here.
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