China and Europe join WTO challenge to Trump metals tariffs, opening new front in trade war

There are fears a showdown over steel and aluminium tariffs could lead the US to exit the World Trade Organisation

Opponents want a WTO dispute panel to investigate the US ‘national security’ justification for the tariffs

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A worker walks over bundles of steel pipe stacked at a stockyard on the outskirts of Shanghai in this file photo. Photo: Bloomber

Published: 7:45am, 19 Oct 2018Updated: 3:23pm, 19 Oct 2018

China and the EU have joined a group of countries asking the World Trade Organisation to investigate the Trump administration’s decision to impose metals tariffs on national security grounds, creating a new front in a trade war that has shaken global markets.

The move sets the stage for a showdown at the WTO that some fear could either lead to a US exit or a flood of new protectionist measures invoking what has until now been a rarely used national security loophole in global trade rules.

The US has said the tariffs on imported steel and aluminium imposed earlier this year are allowed under the WTO’s national security exemption, which permits governments to take “any action which it considers necessary for the protection of its essential security interests.” This has drawn the ire of affected countries, many of which are close American allies, such as the European Union and Canada.

An employee works next to molten iron at a steel mill of Dongbei Special Steel in Dalian, Liaoning province. Photo: Reuters

Countries so far have refrained from challenging that at the WTO. But in a statement issued Thursday, Norwegian Foreign Affairs Minister INE Eriksen Soreide said her country and other nations had chosen to request the establishment of a dispute panel at the WTO.

“We believe that the US’s additional duty on steel and aluminium is in violation of the WTO rules,” she wrote.