US Says China’s WTO Case On Steel, Aluminum Baseless, Not Safeguards

The United States today said China’s request for dispute settlement consultations at the World Trade Organization is “baseless,” as the recent US measures against imports of Chinese steel and aluminum are not safeguards and so do not warrant the $3 billion in retaliation subsequently announced by China. Nevertheless, the US said it is willing to hold consultations with China, but not related to the WTO Agreement on Safeguards.

The US actions on steel and aluminum “are not safeguard measures, and therefore, there is no basis to conduct consultations under the Agreement on Safeguards with respect to these measures,” US Ambassador to the WTO Daniel Shea said in a 4 April letter to Chinese Ambassador to the WTO Zhang Xiangchen.

The US letter if available here [pdf].

Instead, the US President took the actions after determining that “tariffs are necessary to adjust imports of steel and aluminum articles that threaten to impair the national security of the United States.”

Shea said the US would be willing to meet with China to answer questions about US actions under Section 232 of the Trade Expansion Act of 1962, which China had raised. But he said the US will not hold such consultations in relation to the WTO Safeguards Agreement, and would not change its view that the measures it took were not safeguards.

The general difference is that a safeguard is an action taken to protect domestic industry from imports, not a national security argument.

This week, China announced some $3 billion in tariffs on other US products such as agriculture in retaliation. The US argues that there was “no basis” for China’s action.

[Update: later today, China announced its own list of $50 billion in US products on which it would impose tariffs, with a focus on key areas like agriculture. See a story here.]

[Further update: on 5 April, USTR announced possible further tariffs, which have been said to be as much as an additional $100 billion.]