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TWN
Info Service on WTO and Trade Issues (Mar25/11) Geneva, 20 Mar (D. Ravi Kanth) — The United States has dismissed the trade disputes launched by Canada as well as China at the World Trade Organization against the US tariffs imposed on goods originating from these two countries, arguing that “issues of national security are political matters not susceptible to review or capable of resolution by WTO dispute settlement.” In two separate communications but almost on identical lines (WT/DS634/2 and WT/DS633/3) issued on 18 March, the US nevertheless informed Canada and China respectively that it is ready to consult with them, pursuant to Article 4.3 of the Dispute Settlement Understanding (DSU). The US, however, justified the tariffs imposed by Washington under its National Emergencies Act and the International Emergency Economic Powers Act based on national security considerations. “Issues of national security are political matters not susceptible to review or capable of resolution by WTO dispute settlement,” the US said, claiming that “every member of the WTO retains authority to determine for itself those measures that it considers necessary to the protection of its essential security interest, as reflected in the text of Article XXI [on security exceptions] of the GATT 1994.” In its reply to the dispute initiated by Canada, the US said that “Canada has already taken the unilateral decision to impose tariff measures on US goods in response to the US actions listed in the request for consultations.” Specifically, it said, effective March 4, 2025, Canada “imposed countermeasures” of 25 percent tariffs on certain products of US origin “in response to [the US] tariffs”, and announced the intention to impose a 25 percent tariff on additional products of US origin. “It is specious for Canada to invoke dispute settlement for an alleged breach of WTO rules while Canada itself unilaterally decides to impose countermeasures without apparent justification under WTO rules,” the US said. In its reply to the dispute initiated by China, the US said that “China has already taken the unilateral decision that the US actions cannot be justified under WTO rules, and on that basis imposed tariff measures on US goods.” Specifically, the US said, on February 4, 2025, “China asserted that the US actions breach WTO rules and announced additional tariffs of 10 or 15 percent on certain products of US origin in response to the US actions listed in the February 4, 2025, request for consultations.” Further, “on March 4, 2025, China announced additional 10 or 15 percent tariffs on additional products of US origin in response to the US actions listed in the March 4, 2025, request for consultations,” the US maintained. According to the US, “it is specious for China to invoke dispute settlement for an alleged breach of WTO rules while China itself apparently chooses to breach WTO rules by unilaterally determining that a breach has occurred.” The US reasoning seems somewhat flawed as it appears to be masking its allegedly unilateral tariff measures on goods from Canada and China on grounds of the alleged flow into the US of illegal supplies of the drug fentanyl, while accusing both Canada and China for imposing their own allegedly unilateral measures, said people familiar with the development. Even after losing a trade dispute with Hong Kong (China) on the interpretation of what would constitute national security measures, the Trump administration seems to have gone a step further by telling its trading partners that the US tariffs imposed on national security considerations cannot be adjudicated at the WTO, said people familiar with the development. The US, which in its dispute with Hong Kong (China), challenged the panel’s ruling against the US interpretation of national security considerations before the Appellate Body, is fully aware that even if Canada and China press ahead with their dispute complaints at the panel level and manage to secure favourable verdicts, they will not be able to secure a final ruling from the Appellate Body, which remains dysfunctional. In a nutshell, the US appears to have signalled that while it would continue to impose unilateral measures on countries on grounds of national security, WTO members cannot challenge the US measures at the WTO while simultaneously imposing their own retaliatory tariffs on US goods, said people familiar with the development. +
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