US suing Canada, EU, others at WTO for retaliating against tariffs

The United States is suing Canada and a host of other countries at the World Trade Organization for retaliating against Donald Trump’s tariffs on steel and aluminum, firing the latest salvo in the President’s global trade war.

Mr. Trump’s trade chief, Robert Lighthizer, said on ...[July 16th] that U.S. tariffs “are justified,” but the retaliation of other countries is “completely without justification.” The five parallel WTO complaints target Canada, the European Union, Mexico, China and Turkey...

The United States imposed tariffs of 25 per cent on steel and 10 per cent on aluminum on China and other countries in March, then on Canada, Mexico and the EU in June. Canada fired back on July 1 with levies on $16.6-billion worth of American goods, including steel and aluminum, plus consumer products such as whisky, ketchup and frozen pizza.

The WTO challenge comes as Mr. Trump considers putting a further 25-per-cent levy on all cars and trucks imported to the United States, a move that could throw hundreds of thousands of people out of work and devastate the heavily integrated continental auto industry.

The United States cited a “national security” provision, Section 232 of the 1962 Trade Expansion Act, as the reason for imposing its steel and aluminum tariffs. The Trump administration says it has to keep foreign imports out of the country to build up the domestic metal-making capacity so it can make its own steel and aluminum in the event of a war. The United States argues that this justifies the tariffs under international rules, but that other countries’ retaliation is illegal because they imposed tariffs without going through the WTO.

Canada has argued that the national-security rationale was merely an excuse to impose protectionist tariffs.

The Trump administration has, however, sometimes undercut its own rationale. In a Senate hearing last month, U.S. Commerce Secretary Wilbur Ross conceded that Canada is not a national-security threat and said the United States imposed the tariffs on Canada and Mexico as leverage in North American free-trade agreement talks. The United States is demanding new NAFTA rules that would oblige auto makers to use a guaranteed percentage of North American steel...

Canadian officials have said the stalled negotiations will resume this summer, but have not set any dates for further negotiations...

Canadian trade lawyer Mark Warner said that Mr. Lighthizer has a viable legal case. The WTO could very well find that Mr. Trump’s rationale for the tariffs is justified and that the other countries should not have retaliated outside of the WTO...

This was excerpted from 16 July 2018 edition of The Globe and Mail.