US Tries to Challenge China, EU, Canada, Mexico and Turkey Over Tariffs

US President Donald Trump
US President Donald Trump (photo: Pixabay)
By Faith MagbanuaJuly 17th, 2018

Cases against China, the European Union, Mexico and Turkey had been brought out by the United States on Monday at the World Trade Organization for retaliating against American tariffs on imported steel and aluminum.

The tariffs, imposed by Washington, is said to be fixed on the sum of 25 per cent on steel and 10 per cent on aluminum on the grounds that the imported metals pose a threat to national security. China, the EU, Canada, Mexico and Turkey have countered it with taxes on more than US$24 billion worth of US exports.

According to US Trade Representative Robert Lighthizer, the retaliation violated the rules of the Geneva-based WTO, which mediates trade disputes.

He said "Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies.".

If the WTO agrees that the tit-for-tat duties violate its rules, it would evaluate the damage and calculate the tariffs that the United States would be entitled to impose in response. However, WTO proceedings can drag on for years.

In taxing imported steel and aluminum from some countries in March and others in June, US President Donald Trump deployed a little-used weapon in American trade policy.

Under the Trade Expansion Act of 1962, presidents are empowered to impose unlimited tariffs on imports that the commerce Department asserts are threats to America's national security.

The WTO gives countries broad leeway to determine national security interests. But there was long an unwritten agreement that WTO member countries would use the national security justification only very sparingly to avoid abuses.

Trump's steel and aluminum tariffs broke that taboo. Now the commerce department is chasing another, bigger national security case against car imports. Hearings on the proposed tariffs are set for Thursday and Friday in Washington.

Separately, Trump is currently engaged in a trade dispute with China over the tactics Beijing has used to challenge US technological dominance. According to the Trump administration, these include outright cyber theft and forcing the US companies to hand over trade secrets in exchange for access to the Chinese market.

However, just last week, Washington announced 10 per cent tariffs on US$200 billion worth of Chinese goods, that will not take effect until at least September. On Monday, China said that it filed a WTO challenge against those proposed US tariffs.

 

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