The World Trade Organization (WTO) rejected the 2018 tariffs put in place by then-President Donald Trump on foreign steel and aluminum in a Friday ruling that drew opposition from the Biden administration.
Trump imposed tariffs, which are taxes on imported goods, of 25% on steel and 10% on aluminum on the grounds that imports of those products threatened US national security under Section 232 of the Trade Expansion Act .
By raising taxes on imported steel and aluminum, the Trump administration sought to protect domestic manufacturers from what it said was global overproduction — even though Canada and Mexico were exempt from the tariffs along with several other countries.
The tariffs angered US allies, including the European Union and Japan, and sparked a trade dispute at the WTO as China, Norway, Switzerland and Turkey challenged the move.
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In its ruling, the WTO said it was “not convinced” that the US was introducing the tariffs “in wartime or other international relations emergencies” that would warrant the tariffs on national security grounds.
It is unlikely that the WTO’s decision will have much impact in practice. If the US appeals the ruling, it will go nowhere, as the WTO Appellate Body has not functioned for three years because the US blocked the appointment of new judges.
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The Biden administration also entered into agreements with the EU, Japan and the United Kingdom that functionally eliminate tariffs and replace them with import quotas that nullify taxes on imported steel and aluminum that fall below the threshold. Those trading partners dropped retaliatory tariffs against the US in response to the Biden administration’s changes.
Despite taking steps to overturn the tariffs, the Biden administration challenged the WTO’s decision, arguing that it had overstepped its authority by speaking against tariffs based on national security concerns.
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“The United States strongly rejects the flawed interpretation and conclusions,” said Adam Hodge, spokesman for the Office of the US Trade Representative. “For more than 70 years, the United States has taken the clear and unequivocal position that issues of national security cannot be judged in WTO dispute settlement.”
Hodge said the WTO “has no authority to question member states’ national security decisions”. , and we do not intend to scrap the section 232 rights as a result of these disputes.”
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United Steelworkers, a union representing 850,000 workers, released a statement against the WTO ruling saying, “U.S. actions have been effective. Section 232 aid helped boost manufacturing, investment and job creation while keeping America safe kept.”
Critics of the tariffs have argued that protectionist measures are making US industries less competitive. A report from the Cato Institute last year argued that the tariffs place U.S. steel consumers at a “major cost disadvantage compared to their competition in Europe and elsewhere.”
The Associated Press contributed to this report.