WTO says Trump's US steel tariffs broke global trade rules

The World Trade Organization (WTO) has found that tariffs on steel and aluminium imports that were imposed by the US under former President Donald Trump violate global trade rules.

Mr Trump had claimed national security concerns when he announced the new border taxes in 2018, sparking a wave of trade fights around the world.

The WTO rebuffed that argument, saying the duties did not come “at a time of war or other emergency”.

The US said it rejected the ruling.

Assistant US trade representative Adam Hodge said the country had no intention of removing the tariffs.

“The United States has held the clear and unequivocal position, for over 70 years, that issues of national security cannot be reviewed in WTO dispute settlement and the WTO has no authority to second guess the ability of a WTO member to respond to a wide range of threats to its security,” he said in a statement, adding that the reports “only reinforce the need to fundamentally reform the WTO dispute settlement system”.

“The Biden administration is committed to preserving US national security by ensuring the long-term viability of our steel and aluminium industries,” he added.

The case was brought by China, Norway, Switzerland and Turkey.

If the US does not abide by the WTO ruling the countries who have brought the case are entitled, under WTO rules, to impose retaliatory tariffs on the US.

Trade experts said the dispute mattered less for its practical impact than for its implications for the increasingly shaky consensus around how to govern global trade.

“In today’s climate with ever-heightening geopolitical tensions, countries are increasingly likely to trigger the national security exception,” said Chad Bown, global trade expert at the Peterson Institute for International Economics (PIIE).

“This particular ruling thus has importance not only for members’ future policies but also how it impacts their overall support for the WTO system altogether.”

Mr Trump imposed the tariffs of 25% on steel and 10% on aluminium in 2018, citing unfair competition and national security interests.

The taxes have already been eased significantly compared to what was first announced, in which even shipments from close allies in North America risked being affected.

Mr Trump struck deals with some countries, including Mexico and Canada. The Biden administration reached additional agreements with the European Union, Japan and the UK to reduce the impact of the tariffs, while keeping the measures, which have been supported by labour unions representing US steel workers.

Though they angered allies – and raised concern among US manufacturers that use metals about increased costs – the US said the tariffs were aimed primarily at China, which for years has faced concerns from other countries that it has been selling its steel abroad for below market prices thanks to unfair government support.

The office of the US trade representative this week sent a proposal to the European Union outlining a new plan to shape the global steel and aluminium market.

The aim is to promote trade in metals that are produced in ways that minimise carbon emissions and impose tariffs on metals that are deemed to cause too much pollution.

Whilst the details of how such a plan would work haven’t yet been published it is likely that China would face taxes in trying to sell metals to countries that sign up.

The trade war between the US and China, which was sparked in part by the metals tariffs, has had lasting effects on trade between the world’s two largest economies.

A high-profile 2020 trade agreement announced by Mr Trump and Chinese President Xi Jinping helped to reduce some of the public tension over the issue.

But nearly two-thirds of all the goods China sells to the US remain subject to extra taxes, as do roughly 58% of what the US sells to China, according to the PIIE.