US launches WTO challenge against Canada claiming retaliatory tariffs are 'illegal'

Jul 16 2018, 10:13 pm

The US has officially launched a dispute against Canada at the World Trade Organization (WTO).

Canada is one of five separate challenges issued by the US government. It’s also challenging China, the European Union, Mexico and Turkey, claiming that the tariffs each of the WTO members imposed in response to President Donald Trump’s actions on trade “are completely without justification.”

According to the Office of the US Trade Representative, the US steel and aluminum duties imposed by Trump earlier this year are justified under international agreements the United States and its trading partners have approved.

“However, retaliatory duties on US exports imposed by China, the EU, Canada, Mexico and Turkey are completely without justification under international rules.”

The US government said that Trump’s actions on trade in aluminum and steel was to protect the United States’ national security interests.

“The actions taken by the President are wholly legitimate and fully justified as a matter of U.S. law and international trade rules. Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies,” said US Trade Representative Robert Lighthizer in a statement.

“These tariffs appear to breach each WTO Member’s commitments under the WTO Agreement. The United States will take all necessary actions to protect our interests, and we urge our trading partners to work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors.”

The neighbours to the south are currently challenging Canada’s retaliatory tariffs, which came into effect on July 1, 2018, and impose a 10% to 25% duty on $12.7 billion in US imports (based on 2017 trade values).

The news of the WTO challenge comes a day before Pamela Goldsmith-Jones, Parliamentary Secretary to the Minister of International Trade, visits Washington, DC, to meet with legislators, and business and labour leaders.

Global Affairs Canada says that Goldsmith-Jones will meet with US union representatives to discuss shared concerns about steel and aluminum tariffs.

“We should be focused on how we harness North America’s greatest strengths, becoming more competitive and selling to the world,” said Goldsmith-Jones. “That’s the message I will bring to Capitol Hill and to our US friends in Washington.”

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