trade wars

Trump Vows to Pull U.S. Out of WTO If ‘They Don’t Shape Up’

“WTO – WTF!” Photo: Al Drago/Bloomberg via Getty Images

Donald Trump has threatened to withdraw the United States from the World Trade Organization. In an interview with Bloomberg, the president warned that if that institution of global governance — which America had engineered to serve its own enlightened interests — continued its (largely imaginary) persecution of the U.S., then America would take its business elsewhere.

“If they don’t shape up, I would withdraw from the WTO,” Trump declared.

This announcement caused a stir among the media, and may well weigh on the stock market tomorrow. But there’s a strong case that Trump already nullified the WTO last March, when he impulsively imposed across-the-board tariffs on all steel imports. At first brush, this appeared to be a gross violation of WTO rules. But the administration insisted that it was merely availing itself of the trade organization’s exemption for matters of national security: After all, Americans increasing reliance on Canadian steel threatened its very survival as a sovereign state.

Here’s how Edward Alden of the Council on Foreign Relations described the significance of the administration’s audacity, back in March:

March 8, 2018: The day the World Trade Organization died. Twenty-three years and sixty-seven days after its launch on January 1 of 1995. RIP.

…The corpse of the WTO will likely stay warm for a while. The European Union (EU) has said that it will challenge the Trump tariffs before a WTO dispute panel. But the case cannot be won. If the WTO rules against the EU, it will acknowledge that Article XXI of the WTO agreement—the national security exception—allows countries to restrict imports however they choose as long as they cry “national security.” If the United States loses, it will almost certainly reject the ruling, rendering the dispute process null and void.

Anyhow, according to a separate Bloomberg report, the president plans to impose tariffs on another $200 billion worth of Chinese goods next week. The United States already slapped duties on $50 billion worth of Chinese imports earlier this year; Beijing promptly returned the favor, placing punitive taxes on a variety of American products, including many of the farm belt’s top crops. To insulate his friends in the agricultural business from this economic pain, Trump directed the USDA to purchase billions of dollars of surplus food. But Xi Jinping’s government has already promised to place tariffs on another $60 billion of U.S. goods if Trump goes forward with another round of tariffs on China next week — and it seems unlikely that the president will be able to find enough bailout funds to shield America’s producers and consumers from that kind of escalation.

If only there were an ostensibly neutral (but actually pro-American) international body that had the authority to settle trade disputes before they spiraled out of control.

Trump Vows to Pull U.S. Out of WTO If ‘They Don’t Shape Up’