Adjudicator says any security defense of U.S. auto tariffs at WTO ‘very difficult’



Tom Miles | Reuters


The United States will find it “very difficult” to defend President’s Donald Trump’s proposed car tariff against any challenge at the World Trade Organization, a veteran trade adjudicator who has ruled on a related case told Reuters.

Trump said this month that some imported vehicles and parts pose a “national security” threat, justifying tariffs under Section 232 of the Trade Expansion Act of 1962, the basis for tariffs put on steel and aluminum last year.

The car tariff of up to 25 percent, applying to vehicles and components from everywhere else in the world, would be automatically illegal were it not for a WTO exception granted in cases of national security.

Until 2016, using the national security clause was taboo because trade experts feared it could become a common way to get around the rules and erect the kind of trade barriers the WTO was designed to remove.

But it has arisen in disputes between Russia and Ukraine and between Qatar and several of its neighbors, as well as in Trump’s tariffs.

In a rare comment by a senior trade arbitrator, Georges Abi-Saab, a former chairman of the WTO’s Appellate Body, the world’s top trade court, said he doubted the national security argument for cars would withstand a legal challenge.

“Frankly I think, if I were a lawyer (working on the case) I wouldn’t accept to take such a case – not only on moral aspects, but I think it would be very difficult to make it prevail,” he said.

The car tariffs have not yet materialized, since Trump has given the European Union, Japan and other major exporters 180 days to negotiate. A legal challenge from any of the parties cannot be considered until tariffs are active.

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