US challenges is trading partners' retaliatory tariffs at WTO

The US today launched separate disputes at the WTO against its trading partners, including China and the European Union, challenging their hefty retaliatory tariffs against President Donald Trump's duties on steel and aluminum.

After Trump announced 25 and 15 per cent import tariffs respectively on steel and aluminium, retaliatory duties on US imports have been imposed by China (April 2), Mexico (June 5), Turkey (June 21), and the European Union (June 22).

China announced today that it filed a World Trade Organization (WTO) challenge to Trump's proposal for a tariff hike on USD 200 billion of Chinese goods.

US Trade Representatives Robert Lighthizer said retaliatory duties on US exports imposed by China, the EU, Canada, Mexico and Turkey were completely without justification under international rules.

"The actions taken by the President are wholly legitimate and fully justified as a matter of US law and international trade rules. 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," Lighthizer said.

"These tariffs appear to breach each WTO member's commitments under the WTO Agreement. The United States will take all necessary actions to protect our interests, and we urge our trading partners to work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors," he said.

In January this year, US Secretary of Commerce Wilbur Ross issued reports finding that imports of steel and aluminum products threaten to impair American national security.

On March 8, Trump concurred with the Secretary of Commerce's finding and imposed tariffs on imports of steel and aluminum.

The tariffs became effective for some WTO members on March 23, and for others on June 1.

In response, these WTO members have retaliated against products originating in the US.

China's retaliatory tariffs, effective April 2, impose 15 to 25 per cent additional duties on USD 3.0 billion in US imports (based on 2017 trade values).

The EU's retaliatory tariffs are effective in two tiers.

The first tier, effective June 22, imposes 10 to 25 per cent additional duties on USD 3.2 billion in US imports (based on 2017 trade values).

Tier 2 is not effective until June 1, 2021.

In tier 2, the EU will be imposing 10 to 50 per cent additional duties on USD 4.2 billion in US imports (based on 2017 trade values).

Turkey's retaliatory tariffs, effective June 21, 2018, impose 4 to 70 per cent additional duties on USD 1.8 billion in US imports (based on 2017 trade values).

Canada's retaliatory tariffs, effective July 1, impose 10 to 25 per cent duties on USD 12.7 billion in US imports (based on 2017 trade values).

Mexico's retaliatory tariffs went into effect in two tranches, on June 5, and July 5.

In total, Mexico is imposing 7 to 25 per cent duties on USD 3.6 billion in US imports (based on 2017 trade values).

The Trump administration has adopted a confrontational path with some of its major trading partners including India as it threatens to take all necessary steps to protect US interests.