On Friday, a WTO dispute resolution panel, deciding an appeal from China and other countries, ruled that the 25% steel tariff and 10% aluminum tariff did not merit the national security exceptions under which they were implemented. 

Former U.S. President Donald Trump imposed the tariffs in 2018, invoking Section 232 of the 1962 Trade Expansion Act. He argued that steel and aluminum imports were harming the domestic industry, and, in turn, threatening national security. 

The WTO, however, said the national security justification was improper and didn’t merit a national security exception under its rules.

"The panel does not find, based on the evidence and arguments submitted in this dispute, that the measures at issue were taken in time of war or other emergency in international relations,” it said. 

Despite the ruling, the Biden administration said it does not intend to lift the tariffs. 

“The United States has held the clear and unequivocal position, for over 70 years, 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,” said Assistant United States Trade Representative Adam Hodge in a statement. 

“These WTO panel reports only reinforce the need to fundamentally reform the WTO dispute settlement system. The WTO has proven ineffective at stopping severe and persistent non-market excess capacity from (China) and others that is an existential threat to market-oriented steel and aluminum sectors and a threat to U.S. national security,” he added. 
U.S. steel producers also criticized the decision. 

“The World Trade Organization should not get to decide U.S. national security policy,” United States Steel Corporation said in a statement.  

Nucor Corp., meanwhile, argued that it is time to reform the WTO. 

“For years, the U.S. government has recognized that the WTO dispute settlement system often overreaches in its findings and infringes on U.S. sovereignty. The WTO system has allowed non-market economies like China and other countries to exploit the global trading order by building massive, high-polluting excess capacity at the expense of market-based manufacturers around the world. It is time to fundamentally rethink the global trading system to ensure that it is based on fair trade and environmentally friendly production processes,” it said. 

Nucor is part of the Steel Manufacturers Association (SMA), which also called for WTO reforms.

“These convoluted (dispute resolution panel) reports underscore the need for WTO reform and highlight the ineffectiveness of body in dealing with global excess steel capacity and market distorting behavior,” said SMA president Philip K. Bell.

American Iron and Steel Institute president and chief executive Kevin Dempsey agreed. 

“A WTO dispute panel has once again gone beyond its mandate. Each member of the WTO has the right to determine what action it considers necessary to protect its own national security, and today’s panel ruling disregards this central feature of the WTO system,” Dempsey said.

“The tariffs and quotas on steel were instituted by the president following a determination by the Secretary of Commerce that high levels of steel imports and continuing global excess capacity in steel threatened to impair U.S. national security as defined in section 232 of the Trade Expansion Act of 1962. The WTO has no authority to second guess the U.S. government on matters of our national security,” he added.