23 November 2018

Politico: EU and China break ultimate trade taboo to hit back at Trump

Brussels and Beijing on Wednesday launched explosive cases at the World Trade Organization, in which they will argue that Trump’s tariffs on steel and aluminum, imposed in May, cannot be justified on grounds of national security, as the White House claims. The EU and China were joined in their protest by Mexico, Norway, Russia and Canada. [...]

Whichever way the WTO rules, Pandora’s box has been opened. If it rules that national security can justify tariffs, the decision could inspire other countries to play the security card. On the other hand, if Washington finds itself backed into a corner, it could simply quit the WTO.[...]

A common position from the EU and China is a blow to many European and American officials, who had hoped that the trade war would morph into a united front against Beijing. The Trump administration has just unveiled a hardline policy on China. U.S. Vice President Mike Pence last week delivered a blistering speech against China, saying that Washington was in no rush to end the trade war and “would not change course until China changes it ways.”

The cases against the national security justification are not the first to reach WTO panels. There are two other cases still under investigation — involving Qatar and Russia — but the U.S. case is by far the most geopolitically significant. There has never been a ruling on the legitimacy of the national security defense.

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