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White House Blasts Trading Partners for “Hypocrisy” in Levying Retaliatory Duties

Thursday, June 28, 2018
Sandler, Travis & Rosenberg Trade Report

U.S. Trade Representative Robert Lighthizer sharply criticized June 26 the higher duties several countries are assessing on U.S. goods in retaliation for the U.S. tariff hike on steel and aluminum products. Lighthizer argued that it is these other countries, not the U.S., that are doing “great damage to the multilateral trading system” and said the U.S. “will take all necessary actions under both U.S. law and international rules to protect its interests.”

(Click here for ST&R’s new web page providing information on the U.S. tariffs imposed under Section 232 and Section 301 as well as the retaliatory tariffs trading partners are levying on U.S. goods.)

Lighthizer asserted that the U.S. tariffs are “wholly legitimate and fully justified” under both U.S. law and World Trade Organization rules. Article XXI of the General Agreement on Tariffs and Trade gives WTO members broad authority to take action necessary to protect essential security interests, he said, and the U.S. has long held that each sovereign country has the power to decide for itself what actions are essential to its security. The steel and aluminum tariffs were imposed after a determination that massive excess global capacity puts the future of the U.S. industries at risk and thus “plainly fall within the legitimate scope of Article XXI.” Further, the U.S. holds that because each WTO member gets to decide what constitutes its own national security, actions taken pursuant to Article XXI “are not justiciable by any WTO panel.”

By contrast, Lighthizer said, “the European Union has concocted a groundless legal theory to justify immediate tariffs on U.S. exports” and other WTO members such as China, Russia, India, and Turkey have adopted a similar approach. These countries have claimed authority to impose retaliatory duties (many of which are already in place) under WTO rules that allow immediate responses to safeguard measures, but Lighthizer derides this position as “ridiculous” because the U.S. tariffs were taken under a national security statute rather than a separate law for safeguard measures. The retaliatory tariffs thus prove that other countries “are willing to distort WTO rules to mean whatever they want, whenever they want,” Lighthizer said, and underscore “the complete hypocrisy that governs so much of the global trading system.”

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