Over 40 countries have warned that the measures taken by the US on steel and aluminium imports could have repercussions not only on traders’ commercial interests but on the predictability and stability of the rules-based multilateral trading system.
Earlier this month, Trump decided to impose a 25% tariff on foreign-made steel and 10% for aluminium in response to a national security investigation he initiated last spring. The move was part of the Administration’s second annual trade policy agenda, emphasising “aggressive” enforcement of US trade laws and limiting the role of the WTO, and came into force on Friday (23 March).
Go deeper with GlobalData
US clothing industry reeling over Trump’s tariffs
Speaking at the World Trade Organization’s (WTO) Council on Trade in Goods meeting on Friday, 40 member countries, including the 28 members of the European Union (EU), took to the floor to oppose the move by President Donald Trump’s administration. China said the measure is inconsistent with the General Agreement on Tariffs and Trade (GATT) and the WTO Agreement on Safeguards, which, along with Russia, had requested for this issue to be taken up at the meeting.
China was of the view that the US measure did not take into account information demonstrating how steel and aluminium imports would not affect national security. China called on the US to refrain from taking unilateral measures, follow WTO rules and uphold the multilateral trading system.
In retaliation for the measures, China said it plans to impose tariffs of 15% on 128 US imports. Further import duties of 25% may follow in a second-round of levies on another $1.99bn of US products entering China.
See Also:
Steel spat escalates as China slaps tariffs on $3bn of US imports
Separately, Trump last week signed an executive order to levy tariffs on around a wider US$50bn of imports in China, which could include garment and textiles. The tariffs being considered against Chinese consumer products would be imposed under Section 301 of the Trade Act, as part of an investigation into unfair Chinese technology and intellectual property policies and practices.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWinners and losers of a Trump tariff on China garments
Speaking at the Trade in Goods meeting, the Russian Federation said America’s new tariffs exceed the bound rates the US had committed to under WTO rules. It further noted that several WTO members would be exempted from the new US measure and sought further clarification on this exemption and how the measure can be justified under WTO rules. The Russian Federation said it was looking forward to “constructive dialogue” with the US.
Some countries have been temporarily suspended from the tariffs until 1 May, including the EU, Argentina, Australia, Brazil, Canada, Mexico, and South Korea.
Other members who took the floor to raise issue with the new US measure and call for the upholding of the multilateral trading system were Japan; Venezuela; Brazil; New Zealand; Turkey; Korea; Hong Kong, China; Singapore; Thailand; Pakistan; Norway; Australia; India; El Salvador; Switzerland; Paraguay; Guatemala; and Kazakhstan.
Director-General Roberto Azevêdo said in a statement following the meeting: “I encourage members to continue working through the WTO’s many forums and mechanisms to deal with their concerns and explore potential solutions. Actions taken outside these collective processes greatly increase the risk of escalation in a confrontation that will have no winners, and which could quickly lead to a less stable trading system.
“Disrupting trade flows will jeopardise the global economy at a time when economic recovery, though fragile, has been increasingly evident around the world. I again call for restraint and urgent dialogue as the best path forward to resolve these problems.”
In a statement last week, America’s National Retail Federation (NRF) said that holding China accountable for refusing to follow global trading rules is important and necessary, but instead, the tariffs proposed by the administration will punish ordinary Americans for China’s violations.
“Middle and working-class Americans are just starting to see the benefits of tax reform in the form of bigger paychecks and higher wages,” said CEO Matthew Shay. “Engaging in a trade war will erase those gains and result in higher prices for a wide range of consumer products and basic household goods. And the tariffs will create uncertainly for retailers and other businesses who are prepared to reinvest savings from the tax cut in capital investments, wage increases, workforce training and new jobs in communities across the country.
“We urge the administration to reconsider and instead work with our trading partners to enforce the rules and advance targeted trade remedies. We will continue engaging with congressional leadership and the administration to advocate for an approach that doesn’t negatively impact American jobs, jeopardize economic growth and increase the cost of living for American families.”
