US Trade Actions Lead to Flurry of WTO Activity
Several Consultations Have Started the Clock for Possible Litigation
A raft of statements and case initiations took place at the World Trade Organization (WTO) in April, as US trade actions prompted responses from China and other WTO members. A number of consultations have started the clock for possible WTO trade disputes. After one party requests consultations to formally initiate a dispute, the two parties have 60 days to settle the complaint before entering into litigation.
Thus far, three WTO cases have entered into consultations: (1) DS542, concerning China’s licensing regulations; (2) DS543, concerning US tariffs resulting from the Section 301 investigation; and (3) DS544, concerning US tariffs on steel and aluminum.
Statements and case initiations included a request by China on April 5 for consultations following the US Section 232 investigations. The request came concerning the US decision to impose 25 percent and 10 percent tariffs on steel and aluminum, respectively. The complaint to the WTO stated that the tariffs “constitute[d] safeguard measures in substance” and therefore were not consistent with US obligations under the WTO.
The EU filed a separate consultations request regarding steel and aluminum tariffs with the WTO Committee on Safeguards on April 16, and on April 23, the EU requested to join China in its consultations, now case DS544. Hong Kong, India, Russia, and Thailand have also requested to join the consultations.
After reviewing the Section 301 investigation report, President Donald Trump directed the Office of the US Trade Representative (USTR) to initiate a case at the WTO against China’s licensing practices. The EU and Japan have requested to join the US challenge, now case DS542.
In response to tariffs announced after the Section 301 investigation, on April 4 China requested consultations with the United States over the proposed Section 301 tariffs on $50 billion of Chinese exports to the United States, now case DS543.
Ongoing negotiations will determine whether countries will be able to settle these concerns ahead of litigation. On May 1, President Trump made the decision to delay steel and aluminum tariffs on the EU, Canada, and Mexico.