U.S. files World Trade Organization complaint against Canada’s retaliatory tariffs

U.S. files World Trade Organization complaint against Canada’s retaliatory tariffs

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U.S. President Donald Trump’s administration has filed a World Trade Organization complaint against the retaliatory tariffs Canada imposed on U.S. products in response to Trump’s tariffs on Canadian steel and aluminum.

Canada has previously launched a WTO complaint against the U.S. tariffs, which Foreign Affairs Minister Chrystia Freeland calls illegal. The basic argument from the Trump administration, announced Monday, is that Trump’s tariffs are legal but the retaliation is not.

The U.S. announced WTO complaints against not only Canada’s retaliatory tariffs but also those imposed by China, the European Union, Mexico and Turkey.

“The actions taken by the president are wholly legitimate and fully justified as a matter of U.S. law and international trade rules. Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies. These tariffs appear to breach each WTO member’s commitments under the WTO agreement,” U.S. Trade Representative Robert Lighthizer said in a statement.

Under WTO rules, countries are allowed, under certain conditions, to impose temporary “safeguard” tariffs to protect a domestic industry against a damaging surge in imports. Other countries are allowed to retaliate.

Canada and other countries have said that the U.S. tariffs appear to be improper safeguards. But the Trump administration argues that they are not safeguards at all. Rather, the U.S. says, they are being imposed under a national security rule under which retaliation is not allowed.

Trump invoked a controversial national security provision of U.S. trade law as his official justification for the 25 per cent steel tariffs and 10 per cent aluminum tariffs. But he has frequently made a different argument in his speeches, saying that the purpose of the tariffs is to fix trade relationships he believes are unfair.

It could take “two or three years” to settle the WTO disputes related to the U.S. tariffs, said Lawrence Herman, a Canadian trade lawyer. He said the case is “critical,” since it raises issues “that have never been litigated in the WTO before” — and since Trump’s commitment to the WTO already seems to be wavering.

“A defeat by the U.S. would be viewed as catastrophic, and another indication, in Mr. Trump’s view, of how unreliable the WTO is and how biased it is against the United States. But I don’t think the U.S. is on particularly firm ground on this one,” Herman said, arguing that the circumstances do not justify national security tariffs.

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