Trade wars have been on the rise since the Trump administration imposed heavy tariffs on aluminum and steel imports. This is an action that prompted heat-ups in the market among its trade allies. Other major powers such as China and the EU also continue to retaliate. Despite being neck-stiffed on additional taxes, President Trump is embracing a different approach. The decision of sweeping taxes had been described as a frustration to policymakers, businesses, and allies worldwide. However, the resolution has a long-lasting influence on the World Trade Organization (W.T.O).
The WTO has been shoved into a rough role as a primary judge in the ongoing intense fight amid its most prevailing members. The decision embraced by the United States on tariffs raises a concern about two possibilities. Chances are that the approach would be essential to guard national security or a ploy to protect US metal moguls from international competition. In their defense at the WTO, countries such as Mexico, European Union, and Canada have confronted President Trump’s decision to impose tariffs. They said that their metals are not a threat to the national security of America as stated by the administration.
The aforementioned allies retaliated by imposing tariffs on American products. This motivated the administration to bring complaints to the WTO against them. According to CNBC, this leaves WTO in a complex situation of making a decision that has double consequences. Jennifer Hillman, a Georgetown Law Center professor, expressed the extent of stress that the system is in on account of the trade wars. She continued to say that some would assume US withdrawal from the WTO given its tariffs rules. In 1995, the US helped establish a forum to resolve trade differences in addition to maintaining a freely flowing global commerce.
Should the WTO make a ruling that is different from that of the Trump administration, chances are that the US will entirely exit from the WTO. On the other hand, embracing the US on the same could weaken the organization’s power. Additionally, the countries will cite their own national security benefits to overlook problematic rules on farm subsidies, intellectual property, or environmental standards. Rufus Yerxa, National Foreign Trade Council president, and ex-deputy director general WTO has expressed the dangers that lie in these heat-ups.
Trump doubled the tariff rates on Turkey’s aluminum and steel on Friday on account of national security. Current director general of the WTO, Roberto Azevêdo, has expressed the expected tensions on such a complex political matter with the decision it can make. There are continued arguments among US officials while the WTO remains in a quagmire regarding what decision to make.