WTO and the Return of Steel and Aluminum Tariffs

President Trump has issued a series of proclamations imposing tariffs on steel and aluminum imports, echoing similar measures introduced in 2018.[1] At that time, he imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports.[2] Citing Section 232 of the Trade Expansion Act of 1962, the first Trump administration justified these tariffs as necessary to address the national security threat posed by excessive steel and aluminum imports.[3] Following the same policy rationale, the new tariffs will impose a 25% duty on steel and aluminum products entering the U.S. starting March 12, 2025.[4]

The 2018 steel and aluminum tariffs sparked a wave of retaliatory duties from major steel and aluminum-producing countries, along with disputes before the World Trade Organization (WTO).[5] Will the new tariffs face similar challenges? The answer is likely yes. However, with the WTO’s dispute resolution mechanism partially paralyzed due to the U.S. boycott, any rulings—whether in favor of or against the U.S. measures—will not be enforced.[6] This situation only adds to the uncertainty and confusion in global trade.

After the 2018 tariffs were imposed, China, the European Union, and Turkey challenged them at the WTO. In December 2022, a WTO panel ruled that the U.S. duties on steel and aluminum violated WTO rules, as they exceeded the bound tariff rates outlined in the U.S. Schedule of Concessions.[7] Furthermore, the panel rejected the U.S. justification under the national security exception, concluding that the tariffs were not imposed “in time of war or other emergency in international relations” and, therefore, did not qualify for the exception.[8]

While the case was being challenged at the WTO, several members, including the EU and China, imposed retaliatory duties on American goods.[9] In response, the U.S. challenged China’s tariffs at the WTO and secured a favorable ruling. The panel determined that the U.S. measures were “sought, taken, or maintained pursuant to” the security exception rather than a safeguard measure.[10] As a result, China was not permitted to impose retaliatory duties, as the security exception does not authorize affected members to take remedial actions to rebalance trade.[11] 

In short, the U.S. failed to justify its steel and aluminum tariffs at the WTO but prevailed in its challenge against China’s retaliatory duties. In both cases, the losing parties have appealed; however, with the Appellate Body currently nonfunctional, an appeal effectively leaves the decision in limbo.[12] As the U.S. steel and aluminum tariffs reemerge, some countries may consider taking countermeasures or filing new WTO complaints.[13] This poses fresh challenges for the WTO and its members, but it could also serve as an opportunity to clarify or reshape the security exception.

One potential solution is for member states to renegotiate the terms of the security exception to provide greater clarity. However, given the current geopolitical climate, major economies—particularly the U.S. and China—may be reluctant to engage in multilateral trade negotiations. A more fundamental question is whether the WTO should have the authority to determine what constitutes a national security concern for a member state. From the U.S. perspective, invoking national security to justify trade measures should not be subject to WTO review.[14] If this position gains broader acceptance, member states might explore a compromise, such as allowing affected countries to impose retaliatory measures while still preserving each member’s right to protect its security interests. However, given the United States’ “America First” trade policy, significant changes seem unlikely.[15] As a result, the system is likely to remain dysfunctional and fragmented, undermining the original goal of promoting trade liberalization and economic growth.

Hsin-Hui Hsu is a staff member of Fordham International Law Journal Volume XLVIII. 

[1] Proclamation No. 10895, 90 Fed. Reg. 9807 (Feb. 10, 2025); Proclamation No. 10896, 90 Fed. Reg. 9817 (Feb. 10, 2025).

[2] Proclamation No. 9704, 83 Fed. Reg. 11619 (Mar. 8, 2018); Proclamation No. 9705, 83 Fed. Reg. 11625 (Mar. 8, 2018).

[3] Id.

[4] Supra note 1.

[5] See Chad Brown, Euijin Jung & Zhiyao Lu, China’s Retaliation to Trump’s Tariffs, Peterson Inst. for Int’l Econ. (Jun. 22, 2018), https://www.piie.com/blogs/trade-and-investment-policy-watch/2018/chinas-retaliation-trumps-tariffs; European Commission Press Release IP/18/4220, The Commission, EU Adopts Rebalancing Measures in Reaction to US Steel and Aluminum Tariffs (Jun. 19, 2018).

[6] See e.g., Bernard Hoekman & Petros C. Mavroidis, Burning Down the House? The Appellate Body in the Centre of the WTO Crisis, Trade in the 21st Century: Back to the Past?, Bernard M. Hoekman & Ernesto Zedillo (Eds.), Brookings Institution Press, 2021; European University Institute, Robert Schuman Centre for Advanced Studies, Global Governance Programme Working Paper No. RSCAS 2019/56 (2019), https://scholarship.law.columbia.edu/faculty_scholarship/2347.

[7] Panel Report, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/R (circulated Dec. 9, 2022; unadopted).

[8] Id.

[9] See Shannon Van Sant & Bill Chappell, EU Tariffs Take Effect, Retaliating for Trump's Tariffs on Steel And Aluminum, NPR (June 22, 2018), https://www.npr.org/2018/06/22/622488352/eu-tariffs-take-effect-retaliating-for-trumps-taxes-on-imported-steel-and-alumin; Yong Xiong & Victoria Cavaliere, China and the US Ratchet up Trade War in a Day of Retaliation, CNN (Aug. 23, 2019), https://edition.cnn.com/2019/08/23/business/china-tariffs-trade-war/index.html.

[10] Panel Report, China—Additional Duties on Certain Products from the United States, WTO Doc. WT/DS558/R (circulated Aug. 16, 2023; unadopted).

[11] Id.

[12] See Notification of an Appeal by the United States, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/14 (Jan. 30, 2023); Notification of an Appeal by China, China—Additional Duties on Certain Products from the United States, WTO Doc. WT/DS558/8 (Sep. 20, 2023).

[13] See Peggy Corlin, EU Will React against “Unlawful” US Tariffs, Says European Commission, Euro News (Feb. 2, 2025, 9:38 PM), https://www.euronews.com/my-europe/2025/02/10/eu-will-react-against-unlawful-us-tariffs-says-european-commission; Reuters, Brazil Hints at WTO Complaint, Tax on US Product After Trump Steel Tariffs (Feb. 14, 2025, 8:57 AM), https://www.reuters.com/world/americas/brazil-hints-wto-complaint-tax-us-products-after-trump-steel-tariffs-2025-02-14/.

[14] Office of the U.S. Trade Rep., Statement by the United States at the Meeting of the WTO Dispute Settlement Body (Jan. 27, 2023), https://ustr.gov/about-us/policy-offices/press-office/press-releases/2023/january/statements-united-states-meeting-wto-dispute-settlement-body (“For over 70 years, the United States has held the clear and unequivocal position that issues of national security cannot be reviewed in WTO dispute settlement and the WTO has no authority to second-guess the ability of a WTO Member to respond to a wide-range of threats to its security”).

[15] See Memorandum on America First Trade Policy, 2025 Daily Com. Pres. Doc. 145 (Jan. 20, 2025).

This is a student blog post and in no way represents the views of the Fordham International Law Journal.