Washington: President Donald Trump said he doesn’t plan to withdraw from the World Trade Organization, while adding the US needs to be treated more fairly by the global body.
The US won’t exit the Geneva-based organization “at this point," Trump said Friday.
Axios news agency reported earlier in the day that Trump had repeatedly told top White House officials he wants to exit the WTO, citing people familiar with Trump’s thinking. The Stoxx Europe 600 Index and US futures both wobbled following the story’s publication before recovering. Earlier Friday, White House officials sought to ease concerns over the report, with Treasury Secretary Steven Mnuchin calling it an “exaggeration."
Trump spoke about the WTO aboard Air Force One en route to Bedminster, New Jersey. The remarks cap a month when global tensions surged after America’s major trading partners retaliated against US tariffs by imposing restrictions of their own.
In the latest escalation of the global trade spat, Canada on Friday said it would levy duties on C$16.6 billion ($12.6 billion) of American goods in response to American tariffs on steel and aluminium imports. US tariffs on $34 billion of Chinese goods are set to take effect on 6 July and a further $16 billion could follow. China has vowed in-kind retaliation.
Trump has said his tariffs are designed to protect domestic industries that have been hammered by an unfair global trading system. Trump has long criticized the WTO for allowing countries such as China to levy high tariffs on American goods such as cars even as its economy has matured, though as president he’s stopped short of pledging to withdraw from the group.
“They have to treat us fairly," Trump said on Friday about the WTO.
Trump “has concerns about the WTO," Mnuchin said Friday during an interview on Fox Business. “He thinks there’s aspects of it that aren’t fair."
Short echoed the secretary in comments to reporters later that morning, saying “the president has expressed frustrations with international organizations, from a sovereignty perspective. But I think that the president also believes that there’s extensive tariffs assessed on American products overseas. That it’s not a reciprocal tariff."
Yet pulling out of the WTO would isolate the US from the world economy, according to Rufus Yerxa, a former deputy director general at the WTO. “If you want to change it you have to make serious proposals, but you don’t just walk away," he said.
While the US can exit the WTO, it’s uncertain whether Trump could do so without approval from Congress, where many lawmakers — including Republican proponents of free trade — would likely put up a fight. The move also would put US exporters at risk, as other WTO members could raise tariffs on American imports. The US would also forfeit any ability to overturn unfair trade practices in the WTO dispute-settlement system.
“Congress would not accept that," said Bill Reinsch, senior adviser at the Center for Strategic and International Studies. “They are very well aware how it has benefited the US When we file a complaint, we generally win."