Trump's national security claim for tariffs sets off crisis at WTO

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August 13, 2018 12:14 AM

The global trade group has been thrust into an uncomfortable — and potentially damaging — role as chief judge in an intense fight among its most powerful members.

WASHINGTON — President Donald Trump’s embrace of sweeping tariffs has frustrated allies, lawmakers and businesses across the globe. But its most lasting impact could be to hobble the World Trade Organization.

At the center of the battle is whether the United States’ claim that its sweeping steel and aluminum tariffs are necessary to protect national security or whether they are simply a ruse to protect U.S. metal manufacturers from global competition. Allies like Canada, Mexico and the European Union have challenged Trump’s tariffs at the World Trade Organization, saying their metals pose no threat to U.S. national security. They have fired back with their own retaliatory tariffs, prompting the Trump administration to bring its own World Trade Organization complaints against those countries.

Now, the global trade group is in the difficult position of having to make a ruling that could cause problems whatever it does.

“It’s putting tremendous stress on the system,” said Jennifer Hillman, a professor at Georgetown Law Center. “There are those who would go so far to say that the U.S. has almost effectively withdrawn from the WTO by engaging in all the unilateral tariffs we’ve seen.”

Any decision could prove to be the undoing of the World Trade Organization, which the United States helped establish in 1995 as a forum to settle trade disputes. A ruling against the Trump administration could prompt the United States to leave the WTO entirely. But siding with the United States’ claim of national security could also significantly diminish the organization’s authority and prompt other countries to begin citing their own national security interests to ignore inconvenient rules.

Roberto Azevêdo, the World Trade Organization’s current director-general, said that while his group would rule impartially on challenges to the Trump administration’s metal tariffs, any decision on such a sensitive political issue could create damaging tensions in the group.

“Whatever the outcome — regardless of how objective, balanced and unbiased it is — somebody is going to be very unhappy,” he said last month.

This article originally appeared in The New York Times.

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