The U.S. Appeals a WTO Decision Against its National Security Tariffs

“The United States will not cede decision-making over its essential security to WTO panels,” says the Biden administration’s ambassador.

The Biden administration today announced it is appealing a World Trade Organization (WTO) ruling that said U.S. tariffs on imported steel and aluminum are not allowed.

The ruling was announced last month by a WTO panel set up to manage complaints about these tariffs, which were enacted in 2018 by the Trump administration, which cited national security concerns – listed under Section 232 of the Trade Expansion Act of 1962 – about the health of the domestic steel and aluminum industries when doing so. Both industries had been weakened by years of unfair competition from Chinese companies that operate with significant government support. The steel tariffs have worked like gangbusters. With them in place there has been significant capital investment made in U.S. mills and thousands of steelworker jobs created.

Anyway, the Biden administration has been less bombastic in doing so but has kept the tariffs in place, and had some pretty strong words for the WTO when announcing its appeal.  

“The United States will not cede decision-making over its essential security to WTO panels,” said U.S. Ambassador Maria Pagan. “For over 70 years, the United States has held the clear and unequivocal position that issues of national security cannot be reviewed in WTO dispute settlement. The WTO has no authority to second-guess the ability of a WTO member to respond to a wide range of threats to its security.”

This is the right response and the appeal is the right decision. It will put enforcement of this flawed decision on ice, because the WTO Appellate Body lacks the judges necessary to hear appeals because the U.S. has been blocking their appointment until the WTO undergoes reform. As detailed here, WTO panels and its Appellate Body disproportionately target U.S. trade enforcement actions and always manage to rule against them.  

Said Alliance for American Manufacturing President Scott Paul:

The United States made the correct decision in appealing the World Trade Organization’s stunningly wrong ruling on Section 232 steel and aluminum tariffs.  

A thriving domestic steel sector is essential to national security. But for decades, surging imports and subpar capacity utilization eroded the capabilities and competitiveness of American steel. The Section 232 action was fully justified and must not be eroded by an Appellate Body that has clearly overstepped its authority.

We are pleased that the Biden administration continues to defend our broader rights at the WTO, especially in light of the continued threats posed to U.S. economic and national security interests by the Chinese Communist Party.