Trade law is shaping up to be a fascinating area, for all you aspiring lawyers out there.
As I understand it, Trump is relying on Article XXI of the
General Agreement on Tariffs and Trade (GATT) to justify the new tariffs. Interestingly, I haven't found any examples of this Article being used since the WTO began in 1994. I did, however, find the
GATT Analytical Index on this section, which gives an overview of its history, use, and drafting.
In the first paragraph, there is a quotation from one of the drafters that outlines pretty much exactly what the concern is with countries using Article XXI too broadly.
We recognized that there was a great danger of having too wide an exception and we could not put it into the Charter, simply by saying: ‘by any Member of measures relating to a Member's security interests,’ because that would permit anything under the sun.'
As a result, the text of Article XXI seems to narrow its potential uses. I'm not sure which part Trump would use, although I can hazard a guess.
Article XXI(b)(ii) provides an exception relating to the traffic of arms or materials that is directly or indirectly supplying military establishments. I think it would be difficult for Trump to justify a global tariff under this paragraph, since he's hitting every single country. There is a lot of jurisprudence on the words "relating to", which has the effect of narrowing their scope. In a sense, every action "relates to" another, but the WTO's Panels and Appellate Body have limited the meaning of these words.
Article XXI(b)(iii) allows countries to take measures in times of war or emergency in international relations. Trump might try to justify this under the War on Terror or the emergency of being stuck in the "worst trade deal ever", although I suspect a WTO Panel would look upon that with some healthy scepticism. Again, it's hard to justify a global tariff rather than a specific one.
Article XXI(c) allows countries to take any measure in keeping with their obligations under the UN Charter for the maintenance of international peace and security. Judging from the GATT Analytical Index (linked above), this has been invoked when countries are imposing UN-backed sanctions on various countries. Seeing how this is not the case at present, and seeing how there is a global tariff, I'm not sure how Trump would win this either.
Trump is trying to start a trade war, although I bet that many countries will be using the DSU to try to resolve this. This takes a lot of time, and so countries will likely respond with tariffs immediately and have the WTO Panel/Appellate Body back them up afterwards. Of course, I strongly suspect that Trump is using this for leverage for various trade negotiations (see NAFTA, for example) rather than seriously contemplating the use of this exception.
Now, I'm not a trade lawyer, so maybe I'm wildly off-base with everything. But that's my understanding of the WTO Agreement as a lowly student.
Octavious wrote:Well, that confirms Trump's national security argument then. If the US relies on overseas powers for types of steel unavailable at home he has a valid point.
This doesn't necessarily confirm Trump's national security argument, because he defines national security very broadly to include every country in the world. I think it's pretty hard to justify slapping Canada and the EU with tariffs in the name of national security. This gets especially difficult since Trump has explicitly said he's starting a trade war.
leon1122 wrote:The title is misleading and false. Our “allies” started the trade war. We just refused to fight back up to now.
If the USA's allies started a trade war, the USA could easily have made use of the Disute Settlement mechanism under the WTO. Most countries of the world, including the USA, have done so.
Here is a link to the DSU Gateway; you can read Panel Reports and Appellate Body Reports for every case there. Be forewarned, however, that these make for very dry reading.
peterlund wrote:USA violates the rules of WTO of which it is a signed member.
Then other countries may make use of the DSU. See above in my reply to leon1122. Trump is trying to justify this under Article XXI of the GATT, which would mean that there is no violation (if he's correct).
Jamiet99uk wrote:Would you care to verify this, dickhead?
Easy, Action.
Ogion wrote:Economics works that way.
I have noticed a tendency among first year students and people who spend too much time on Reddit of referring to disciplines as uniform wholes with 100% correct answers. An example of this would be people who say "science works like that", or "math works like that", and so on. These people also tend to read Vox and think they can solve the world's problems after being given a rudimentary understanding of basic social science principles, as summarised by people like Ezra Klein. I am always thoroughly unconvinced by their arguments.