I have been puzzling over what is happening with the safeguards issues related to the U.S. steel/aluminum "national security" tariffs (and as I was drafting this post, Brett Williams raised the same issue in a comment here). This is what I see so far.
Safeguards Agreement Article 8.2 provides:
If no agreement is reached within 30 days in the consultations under paragraph 3 of Article 12, then the affected exporting Members shall be free, not later than 90 days after the measure is applied, to suspend, upon the expiration of 30 days from the day on which written notice of such suspension is received by the Council for Trade in Goods, the application of substantially equivalent concessions or other obligations under GATT 1994, to the trade of the Member applying the safeguard measure, the suspension of which the Council for Trade in Goods does not disapprove.
On March 26, China requested consultations for both steel and aluminum. This is from the steel request:
On 8 March 2018, the United States of America ("United States") issued a presidential proclamation, indicating that steel articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States, adjust the imports of steel articles by imposing a 10% ad valorem tariff on steel articles.
China takes the view that the above-mentioned measure of the United States is safeguard measure although it's in the name of national security measure.
As a Member that is an interest party of the product at issue, The People's Republic of China ("China" or "we") hereby formally requests consultations with the United States pursuant to Article 12.3 and 8.1 of the Safeguards Agreement and Article XIX:2 of the General Agreement on Tariffs and Trade 1994 (GATT 1994) with respect to the United States' safeguard measures on steel.
Then on March 29, China submitted a notification under Article 12.5 of a proposed suspension of concessions and other obligations under Article 8.2, which contains the following:
1. Which Member is proposing suspension of concessions and other obligations referred to in Article 8.2?1. Which Member is proposing suspension of concessions and other obligations referred to in Article 8.2?
China.
2. Specify the measures, the product subject to the measures, and the Member imposing the measures in relation to which the Member is proposing suspension of concessions and other obligations referred to in Article 8.2.
The applied measures imposed by the United States on imports of steel and aluminum from 23 March 2018.
China takes the view that the above-mentioned measures of the United States are safeguard measures although it's in the name of national security. We believe the measures taken by the United States are not consistent with its obligations under the relevant provisions of the GATT 1994 and Safeguards Agreement.
3. Describe the proposed suspension of concessions and other obligations referred to in Article 8.2 and the proposed date from which it will come into effect.
The proposed suspension of substantially equivalent concessions and other obligations under Article XIX:3 of the GATT 1994 and Article 8.2 of the Agreement on Safeguards takes the form of an increase in tariffs on selected products originating in the United States (as indicated in Annex I and calculated as indicated in Annex II), based on the part of the measures of the United States which were not taken as a result of an absolute increase for the last 3 years (2014-2016) . China reserves its right to further suspend substantially equivalent concessions and other obligations based on the rest part of the measures of the United States.
Without prejudice to the effective exercise of its right to suspend substantially equivalent concessions or other obligations referred to in Article 8.2, China reserves its right to effectuate the proposed suspension immediately and adjust the products as well as the tariff rates.
China then listed the products for which it was suspending concessions, along with the tariff rate to be applied.
And finally, as I understand it, China's tariffs took effect on April 2.
If these dates are all correct, how are China's actions consistent with the time-frames set out in Safeguards Agreement Article 8.2?
And while we are talking about justifications, we all know that the U.S. has offered GATT Article XXI as a justification for its steel/aluminum tariffs. But I haven't heard the U.S. offer any argument to justify the Section 301 tariffs. What argument would it use if China brings a WTO complaint against these tariffs?
