Statement by Ambassador Robert E. Lighthizer on Retaliatory Duties

Washington, DC – U.S. Trade Representative Robert Lighthizer today released the following statement regarding new tariffs against the United States by certain WTO Members, including the European Union:  

“President Trump has taken actions on trade in steel and aluminum to protect our national security interests.  These actions are wholly legitimate and fully justified, both as a matter of U.S. law and WTO rules.  By contrast, the European Union has concocted a groundless legal theory to justify immediate tariffs on U.S. exports.  Other WTO Members, including China, have adopted a similar approach.

“These retaliatory tariffs underscore the complete hypocrisy that governs so much of the global trading system.  For months, the EU, China, and others have criticized the trade policy of the United States, while claiming to champion the WTO.  But their recent tariffs prove that they simply ignore WTO rules whenever doing so is convenient.

“Article XXI of the General Agreement on Tariffs and Trade gives broad authority to WTO Members to take action necessary to protect essential security interests.  For decades, the United States has consistently held the position that actions taken pursuant to Article XXI are not justiciable by any panel of the WTO.  In other words, each sovereign country must have the power to decide, for itself, what actions are essential to its security.  Any other reading of the Article would represent an unacceptable constraint on the freedom and independence of all WTO Members.

“President Trump’s actions regarding steel and aluminum plainly fall within the legitimate scope of Article XXI.  Faced with massive excess capacity that puts the very future of our steel and aluminum industries at risk, President Trump took certain measures that he deemed essential to the national security of the United States.  These measures were implemented only after long and careful analysis, and after all trading partners had the chance to address our concerns.

“While the United States has acted responsibly here, the European Union and its followers have not.  Rather than work with the United States, they have retaliated with tariffs designed to punish U.S. companies and workers.  In an effort to give cover to this blatant disregard for WTO rules, they claim to be acting in reliance on a narrow exception that applies only in response to a safeguard measure.  That exception does not apply here, however, because the United States has not taken a safeguard measure.  The President’s actions here were taken under a U.S. national security statute – not under the separate U.S. statute for safeguard measures.  In fact, there is no credible basis for the EU’s legal theory.

“When the EU and others falsely assert the U.S. steel and aluminum duties are safeguard measures, and impose retaliatory duties under this pretense, they do great damage to the multilateral trading system.  Indeed, they show that they are willing to distort WTO rules to mean whatever they want, whenever they want.

“Faced with these unjustified tariffs, the United States will take all necessary actions under both U.S. law and international rules to protect its interests.”

Background:

In January 2018, the U.S. Secretary of Commerce issued reports finding that imports of articles of steel and aluminum threaten to impair national security.^[1]  On March 8, the President concurred with the Secretary of Commerce’s finding and imposed tariffs on imports of steel and aluminum.^[2]   The tariffs became effective for some WTO members on March 23, and they became effective for others on June 1.

Excess capacity, driven by China’s non-market economic policies, has made it impossible for U.S. producers to make a decent return and the investments necessary to ensure their long-term viability.  No reasonable person disagrees that Chinese excess capacity is swamping and undermining markets worldwide.

The U.S. steel and aluminum duties are justified under international agreements the United States and its trading partners have approved.  Since 1947, the U.S. Government has held the consistent view that any country can invoke Article XXI of the GATT (General Agreement on Tariffs and Trade) to take the action it considers necessary to protect its essential security interests.

The U.S. duties were imposed by the President pursuant to Section 232 of the Trade Expansion Act of 1962, entitled “Safeguarding National Security”.  This is a national security action, plain and simple.  The United States is not invoking Article XIX of the GATT, permitting emergency safeguard actions, to justify its duties.  So any assertion that others’ retaliatory duties are a justified response to a U.S. “safeguard action” is, on its face, ridiculous.

China, Russia, the European Union, India, and Turkey requested consultations with the United States under the WTO Agreement on Safeguards.  In response, the United States explained that the duties imposed on imports of steel and aluminum are not safeguards action under GATT Article XIX, but rather duties imposed for reasons of national security under GATT Article XXI.  Retaliatory duties on U.S. imports have been imposed by China (April 2), Mexico (June 5), Turkey (June 21), and the European Union (June 22). Canada has indicated that it may impose retaliatory duties on U.S. imports.  India, Japan, and Russia have notified the WTO of their proposed suspension of commitments under the Agreement on Safeguards.

Because the United States has not invoked and does not seek to benefit from the right to take emergency safeguard action under Article XIX or the WTO Agreement on Safeguards, no WTO Member has a right to retaliate with duties under an Agreement that does not even apply.  Accordingly, the duties that have been announced on U.S. exports are completely without justification under international rules.