The World Trade Organization (WTO) has rejected 2018 tariffs put in place by then-President Donald Trump on foreign steel and aluminum in a decision on Friday that sparked a push back. Biden administration.
Trump imposed tariffs, which are taxes on imported goods, of 25% on steel and 10% on aluminum on the grounds that the importation of these products threatened the national security of the United States in under section 232 of the Trade Expansion Act.
By raising taxes on imported steel and aluminum, the Trump administration sought to protect domestic manufacturers from what it believed to be global overproduction – although Canada and Mexico as well as several other countries were exempt from tariffs.
The tariffs angered US allies, including the European Union and Japan, and led to a trade dispute at the WTO when China, Norway, Switzerland and Turkey challenged the decision.
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In its decision, the WTO said it was “not convinced” that the United States applied the tariffs “in time of war or other emergency in international relations” that would justify the tariffs for national security reasons.
The WTO decision is unlikely to have much impact in the real world. If the United States appeals the decision, it will go nowhere because the WTO Appellate Body has not functioned for three years because the United States has blocked the appointment of new judges.
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The Biden administration has also struck deals with the EU, Japan and the UK that functionally eliminate tariffs and replace them with import quotas that negate taxes on imported steel and aluminum volumes. that fall below the threshold. These trading partners dropped retaliatory tariffs against the United States in response to changes by the Biden administration.
Although it took steps to reverse the tariffs, the Biden administration challenged the WTO’s decision and argued that it exceeded its authority by ruling against the tariffs on national security grounds.
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“The United States strongly rejects the erroneous interpretation and conclusions,” said Adam Hodge, spokesman for the office of the U.S. Trade Representative. “The United States has taken the clear and unequivocal position, for more than 70 years, that national security issues cannot be addressed under WTO dispute settlement.”
Hodge said the WTO “does not have the power to question” member countries’ national security decisions. His statement concluded, “The Biden administration is committed to preserving the national security of the United States by ensuring the long-term viability of our steel and aluminum industries, and we have no intends to terminate Section 232 rights as a result of these disputes.”
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United Steelworkers, a union representing 850,000 workers, issued a statement opposing the WTO ruling that “US actions have been effective. Section 232 relief has helped promote production, investment and job creation, while keeping America safe.”
Critics of the tariffs have argued that protectionist measures make US industries less competitive. A Cato Institute report from last year argued that the tariffs put US steel consumers in a “major cost situation relative to their competitors in Europe and elsewhere.”
The Associated Press contributed to this report.
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