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..To read more about Trump’s trade fight, click here.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..Member ‘Hypocrisy’In applying the tariffs, Washington relied on a rarely-used WTO national security exemption, which permits governments to take “any action which it considers necessary for the protection of its essential security interests.” Separately, the U.S. blasted the “hypocrisy” of Canada, China, the EU and Mexico for their unilateral retaliation against U.S. goods in response to Trump’s steel and aluminum tariffs.Steel as National Security Issue? Here’s the U.S. Law: QuickTake“Just as these members appear to be ready to undermine the dispute settlement system by ignoring the plain meaning of” the WTO’s national security exemption, “so too are they ready to undermine the WTO by pretending to follow its rules while imposing measures that blatantly disregard them,” according to the U.S. remarks.Seven WTO members -- Canada, China, the EU, India, Mexico, Russia, and Turkey -- have imposed retaliatory levies on more than $25 billion worth of U.S. goods in response to the American tariffs.To contact the reporter on this story: Bryce Baschuk in Geneva at bbaschuk2@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard Bravo, Tony Czuczka©2018 Bloomberg L.P.

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

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