WTO Starts U.S. Tariffs Probe, Crossing Trump’s Red Line

(Bloomberg) -- The World Trade Organization agreed Wednesday to investigate the legality of U.S. tariffs on steel and aluminum imports based on national security concerns, a decision the U.S. says could undermine the legitimacy of the Geneva-based trade body.

Members including the European Union and China asked the WTO to examine the U.S. levies, which they say don’t bolster security but further U.S. economic interests.

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Any review of America’s essential security interests “would undermine the legitimacy of the WTO’s dispute settlement system and even the viability of the WTO as a whole,” the American delegation said at a Wednesday meeting of the WTO dispute settlement body, according to prepared remarks seen by Bloomberg.

The WTO has long avoided this politically fraught confrontation. If the trade organization decides in favor of the U.S., the decision could entice the body’s 164 members to use the national security justification to impose protectionist measures for economic gain; if it rules against the U.S., President Donald Trump could decide to leave the WTO entirely.