Switzerland wins WTO against US on steel

Switzerland was heard at the WTO following its 2018 complaint against US tariffs on steel and aluminum. In four decisions published on Friday in Geneva, the arbitral tribunal agrees with him, as well as with three other countries, including China.

Like many other actors, Switzerland had denounced the protectionist policy of former US President Donald Trump as unfair. The latter had decided on customs tariffs for certain products, including steel. The goods in question amounted to an export value of several tens of millions of francs a year, while the Federal Council decided not to apply retaliatory measures.

According to the Special Group (arbitration tribunal) of the World Health Organization (WTO), the additional taxes of 25% on steel products and 10% on aluminum products violate several United States commitments. The same comment applies to products derived from these two components.

Likewise, no war or international tension justified by security reasons, according to the court, which asks the United States to fulfill its obligations by removing the devices that could violate them. ‘The panel followed the legal arguments presented by Switzerland’, reacted the State Secretariat for the Economy (SECO).

The procedure before the arbitral tribunal will have taken four years. He had mentioned the pandemic, then the complexity of the case to explain the different delays.

Trade tensions with China

All the various countries’ complaints against the United States have been grouped together for ease of evaluation. On Friday, China, Norway and Turkey got the same favorable rulings as Switzerland.

For Berna, this request to the entity was ‘important’. It was only the second she had released in over 20 years at OMC. The Swiss ambassador to the organization, Didier Chambovey, in 2018 denounced unilateral safeguard measures that “nothing justifies”. Washington had motivated its policy by its security interests.

Among the target countries, the United States primarily attacked China, triggering a months-long trade war between the two countries. Beijing had decided on retaliation, before an appeasement was found between the two powers.

billions of dollars

Switzerland, like other actors, has always admitted that the Chinese ‘overcapacity’ targeted by Washington is ‘a real concern’. But this must not be resolved by means that violate WTO agreements, she said. The United States retorted that no international jurisdiction should rule on the measures it takes for security reasons.

Admittedly, they had granted more than two-thirds of the exemptions to Swiss exports. But the American decision also had repercussions on European politics, affecting Swiss imports and exports from the European market.

With Beijing, tensions rose rapidly. Washington imposed additional tariffs on 250 billion Chinese imports in total. Beijing then levied taxes on a total of $110 billion (about 109 billion francs) worth of American goods.

american rejection

The United States reacted by rejecting the WTO decision without appeal, in the name of national security.

“The United States strongly rejects the erroneous interpretation and conclusions of the World Trade Organization (WTO) panel reports released today on challenges to United States actions under Article 232 on steel and aluminum,” said a spokesman for the US Trade Representative Hodge in a statement.

He argued that ‘the United States has for more than 70 years taken the clear and unequivocal position that national security issues cannot be addressed in WTO dispute settlement’.

Furthermore, he emphasized, the WTO ‘does not have the authority to question a WTO member’s ability to respond to a wide range of security threats’.

The United States can appeal the decision. However, the world trade police appellate body has not been operational since Donald Trump blocked the appointment of judges, a blockade that Joe Biden did not end.


Leave a Comment