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EU builds case against metals tariffs

The EU is fighting U.S. tariffs set to take effect May 1 through the World Trade Organization safeguards consultation process.

   The EU on Monday requested safeguard consultations at the World Trade Organization with the United States over its Section 232 global tariffs on steel and aluminum, according to a document circulated to WTO members.
   The process is distinct from standard WTO dispute settlements, providing a potentially easier path for the EU toward retaliation against the U.S. should consultations not resolve its qualms.
   The United States on March 23 implemented global tariffs of 25 percent on steel and 10 percent on aluminum after a Trump administration investigation pursuant to Section 232 of the Trade Expansion Act of 1962 found that such imports are impacting national security. For now, the U.S. is deferring the imposition of those tariffs on the EU until May 1.
   Administration officials have argued that the measures are allowed under WTO rules exempting members from staying at or below their WTO-bound tariff rates if certain measures are needed for national security.
   But the EU’s consultation request claims the measures are “in essence safeguard measures” and that the United States failed to notify the WTO Committee on Safeguards as required by the Safeguards Agreement.
   The WTO Agreement on Safeguards states that if consulting parties don’t agree on an adequate means of compensation for adverse effects of any examined measure on the exporting member’s trade, then members are free to retaliate within 90 days of when the trade measure is applied and within 30 days of providing written notice to the WTO Council for Trade in Goods.
   Any retaliation must be “substantially equivalent” to the amount of trade lost by a member as a result of any other member’s trade measures, according to that agreement.
   The Goods Council, which consists of all WTO members, can block retaliation in safeguards cases only if all members in attendance at its meeting reject the suspension of concessions, a WTO spokesperson said in an email. “There would need to be consensus.”
   The EU’s consultation request notes that the EU “reserves all its rights” under WTO rules, “including the Agreement on Safeguards.” The EU said it “looks forward to a prompt reply” by the United States to establish a setting for consultations.
   The EU’s request for safeguard consultations follows a March request by China for standard WTO dispute consultations over the United States’ Section 232 tariffs.
   The United States, EU, and China potentially could voice their opinions during the April 23 WTO Safeguards Committee meeting on the level of retaliation Turkey is imposing on Thailand in response to a Thai safeguard on steel imports.
   In apparently the first instance of a member questioning the level of suspended concessions under the WTO Safeguards Agreement, Thailand is arguing that Turkey applied tariffs on Thai goods which exceeded the trade Turkey lost as a result of the safeguard.