Home / News / World /  US may face retaliation at WTO over steel tariff

Geneva: As US President Donald Trump intends to intensify “trade wars" on steel and aluminum because they are “easy to win", several members- Canada, the European Union, China, and South Korea among others- are considering a retaliatory action against Washington on several fronts, according to people familiar with the development.

“We are considering a trade dispute against the US at the World Trade Organization and we are waiting to see the final order on the proposed safeguard duties on steel and aluminium," a trade envoy of a major steel-producing country, who asked not to be named, said on Sunday.

“It remains to be seen whether countries will pursue a single dispute against the US on the safeguard duties," he said. Unlike in 2002, when then US President George W. Bush imposed safeguard duties as high as 30% that were later removed in the face of a ruling by the WTO, President Trump is in no mood to reconsider his decision despite tit-for-tat threats by the European Union.

“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk," said President Jean-Claude Juncker of the European Commission on 1 March. “I had the occasion to say that the EU would react adequately and that’s what we will do… The EU will react firmly and commensurately to defend our interests," he said. The EU officials are expected to announce a long list of American goods for retaliation on Monday. The list includes American steel and agricultural products such as rice, maize, orange juice and cranberries.

But, in an angry response to the EU’s statements, President Trump threatened in a tweet on Friday that “trade wars are good" and “easy to win" vowing to defend his industry and workers in the America First trade policy. “We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!" he challenged.

“If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their Cars which freely pour into the US. They make impossible for our cars (and more) to sell there. Big trade imbalance!"

China, which is one of the major targets for Trump’s safeguard actions based on an archaic provision concerning national security, has issued a measured statement on Sunday saying “China doesn’t want a trade war with the US but we will not sit idly should Chinese interests be damaged."

Senior Chinese and American officials held a meeting last week in Washington to iron out their differences.

Canada has also announced that it would take appropriate action if President Trump presses ahead with the safeguard duties on steel and aluminium. The WTO director general also cautioned that “the potential for escalation is real" on 1 March, arguing that “a trade war is in no one’s interests."

In 2002, then US President George W Bush imposed safeguard duties between 8-30% safeguard duty before the elections to the Congress and was forced to remove them in November, 2003 after the WTO authorized more than US $ 2 billion in sanctions on American goods because of the illegal safeguard duties.

India had won two trade disputes against the US in steel until now but Washington had not fully implemented the WTO recommendations in the second dispute of 2006. The US had imposed anit-dumping and countervailing duties on Indian steel products which were found to be inconsistent with the WTO rules.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout