The United States is pleased with the World Trade Organization (WTO) panel report released today, recognizing that the U.S. Section 232 actions on steel and aluminum are security measures, and that the People’s Republic of China (China) illegally retaliated with sham “safeguard” tariffs.
China’s decision to pursue this dispute highlights its hypocrisy by both suing the United States in the WTO and at the same time unilaterally retaliating with tariffs. The panel rightly rejected China’s argument that the U.S. Section 232 actions are safeguard measures that may be “rebalanced” under WTO rules.
China’s use of the WTO dispute settlement system to challenge the U.S. Section 232 national security actions has caused grave systemic damage to the WTO. The WTO does not have the authority to second-guess a WTO Member’s response to threats to its security, and WTO reform must ensure that issues of national security cannot be reviewed in WTO dispute settlement. Furthermore, the WTO has proven ineffective at addressing non-market excess capacity from China and others that is an existential threat to market-oriented steel and aluminum sectors and, through the effects on imports, a threat to U.S. national security, including by eroding U.S. steel and aluminum manufacturing capacity.
The United States condemns China’s refusal to correct its severe and persistent non-market excess capacity for steel and aluminum that is at the heart of a global crisis that led to the U.S. Section 232 national security actions. The Biden Administration is committed to standing up for U.S. workers, and all workers of market-oriented companies and industries, and creating and maintaining a fair, worker-centered trading system.