Trump, Trade and National Security -- Blowing Up the WTO?

Abstract

The Trump administration’s reliance on a national security provision in the recent Department of Commerce report and the president's proclamations on new tariffs of steel and aluminum will lead to serious challenges by countries in the World Trade Organization (WTO). The administration is relying upon the rarely used Section 232 of the Trade Expansion Act of 1962. The most likely defense by the United States (US) in the WTO would be to rely on the rarely raised and never-decided WTO “security exception” provided in Article XXI of the General Agreement on Tariffs and Trade (GATT). This litigation would most likely lead to the disintegration of the WTO. The federal courts have the constitutional right to declare presidential actions unconstitutional if these actions are not within the congressional delegation of authority or the president’s inherent authority. Federal judges have very closely scrutinized the president’s inherent authority regarding trade powers. This includes claims that the president makes while acting as commander in chief. The Trump administration’s decision to use national security concerns or to declare a national emergency (under Section 232 or the IEEPA) as justification for imposing trade restrictions on steel and aluminum imports or on the transfer of intellectual property rights could lead to a trade disaster of the first order. Such a situation has not occurred in U.S. trade diplomacy since the founding of the postwar international economic order.