WTO warns of ‘less stable trading system’ after Trump tariffs

President Trump’s new tariffs were roundly criticized at a meeting of the World Trade Organization (WTO) on Friday.

WTO Director-General Roberto Azevêdo warned the U.S. decision to disrupt trade flows “will jeopardize the global economy at a time when economic recovery, though fragile, has been increasingly evident around the world.”

Azevêdo urged member countries to continue to discuss disagreements within the organization.

“Actions taken outside these collective processes greatly increase the risk of escalation in a confrontation that will have no winners, and which could quickly lead to a less stable trading system,” he said, according to Reuters.

Trump announced earlier this month a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. He said they were necessary to protect the national security of the nation.

Numerous countries represented at the WTO meeting rejected that logic, Reuters reported. 

South Korea warned that nations should be careful in invoking national security as justification for trade barriers as it could lead other countries to try to justify measures they take to protect their industries, according to the report.

Many other countries also expressed fears that the U.S. tariffs could lead to a “domino effect” that could be harmful to the unity of the WTO.

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The New York Times reported this week that Trump’s unilateral action flouted WTO rules because the United States did not first seek to adjudicate through the organization. However, the U.S. is looking to the WTO to act on accusations of unfair Chinese trade practices.

China’s representative said the new tariffs are “groundless” and violate several WTO rules, according to a trade official who spoke with Reuters.

Russia and China are reportedly preparing retaliatory measures to offset the effects of the steel and aluminum tariffs. Russia has asked the U.S. to explain the basis on which they chose certain countries to temporarily exempt from the tariffs.

The U.S. has exempted the EU, Argentina, Australia, Canada, Mexico, South Korea and Brazil from the steel and aluminum tariffs and left open the possibility that others could be added to the list.