WTO: Turks Retaliatory Tariffs on US Goods Dismissed

A World Trade Organization dispute settlement panel report has found that Türkiye acted inconsistently with its WTO obligations by imposing additional duties on certain imports from the United States.   Türkiye had imposed the duties on US goods in response to the Section 232 duties adopted by the United States in 2018 on imports of steel and aluminum products on national security grounds.

The United States filed a dispute against Türkiye’s duties, arguing that Section 232 is a national security measure, and therefore its use does not fall under WTO rules.

The panel disagreed with Türkiye’s argument that, because Türkiye’s additional duties were adopted pursuant to Article 8.2 of the Agreement on Safeguards and Article XIX:3(a) of the General Agreement on Tariffs and Trade (GATT) 1994, Türkiye was entitled to impose the duties in order to rebalance the trade effects of the US tariffs. The panel found that Türkiye’s additional duties were inconsistent with the most favored nation treatment obligation and with the obligation to adhere to tariff bindings in its schedule of concessions contained in Articles I and II of the GATT 1994 respectively.

The ruling concerns one of what were originally seven WTO panel proceedings initiated by the United States against additional duties imposed by certain WTO members on US imports in response to the US Section 232 tariffs on steel and aluminum imports.

No AB for Appeal
If Türkiye appeals the panel report, the dispute will essentially fall into limbo because the WTO’s Appellate Body is not functioning.  

The US Trade Representative’s Office expressed satisfaction with the panel report, saying that it recognizes the Section 232 tariffs on steel and aluminum are security measures. “Türkiye’s use of the WTO dispute settlement system to challenge the US Section 232 national security actions undermines the WTO,” USTR spokesperson Sam Michel said in a statement. “The WTO does not have the authority to second-guess a WTO Member’s response to threats to its security, and WTO reform must ensure that issues of national security cannot be reviewed in WTO dispute settlement.”

In addition, “the WTO has proven ineffective at addressing non-market excess capacity from China and others, including Türkiye itself, that is an existential threat to market-oriented steel and aluminum sectors and, through the effects on imports, a threat to US national security, including by eroding US steel and aluminum manufacturing capacity,” he said.