The U.S.A. has introduced additional tariffs on steel and aluminum products. Some states successfully resisted this, but America also gets a little right.
Since March 2018, the U.S. has imposed additional tariffs of 25 percent on imports of certain steel products and 10 percent on imports of certain aluminum products for ‘national security’ reasons.
Switzerland, like nine other members of the World Trade Organization (WTO), then initiated dispute settlement proceedings with the Geneva-based international organization in 2018.
The nice tour first
But Switzerland had first made a friendly request to the Americans to be exempted from the additional tariffs. After all, U.S. import duties for Switzerland amounted to about 80 million Swiss francs in 2017.
However, the Americans did not respond to the request and Switzerland then took the matter to the WTO, as Johann Schneider-Ammann, then head of the Department of Economic Affairs, announced regarding the Federal Council’s decision.
Other WTO members affected include the EU, Mexico, Canada and Norway, which also resisted.
Right from Switzerland’s side
Now, after four years, a result is available, as the State Secretariat for Economic Affairs (SECO) announced surprisingly on Friday evening. The WTO panel had followed Switzerland’s legal arguments, it said.
The panel had come to the conclusion that these U.S. measures violated several provisions of the General Agreement on Trade in Goods (GATT) and could not be justified by the security exception provided for in that agreement.
Russia and India still in dispute
Research by muula.ch revealed that the Swiss case was decided together with those of China, Norway and Turkey. Still open are the proceedings of India and Russia against the U.S.A.
The EU formally agreed with America, but the proceedings can be restart.
And Canada as well as Mexico settled the dispute with the United States in mutual agreements in 2021.
Minimum requirements unfulfilled
However, the U.S. is also somewhat strengthened in its view. Indeed, the report does not question the right of WTO members to take measures to protect their own security interests, it stated.
The WTO confirmed that states had a great deal of room for maneuver in this regard. But only as long as they meet certain minimum requirements, compliance with which could be verified by a WTO panel.
But apparently the U.S. was wrong about the additional tariffs. As muula.ch hears from reliable sources, the maximum tariffs agreed in 1994 in particular have been exceeded by the U.S.A.
In addition, the U.S. had exempted individual countries from the additional tariffs, which gave these countries inadmissible import advantages under the applicable rules.
No amicable agreement
WTO dispute settlement proceedings are initiated with a so-called request for consultations. In this first stage of the proceedings, the parties try to reach an amicable settlement.
If these consultations fail to produce results, as in the case of Switzerland against the U.S.A., an arbitration body (panel) is convened. However, the decision of this arbitration body can be appealed to an Appellate Body.
The U.S.A. would therefore still have a chance here.