Canada Opens WTO Dispute on 25% US Tariff
Canada opened a dispute at the World Trade Organization on March 5 to challenge the new U.S.-imposed 25% tariff on all non-energy goods and 10% tariff on energy goods from Canada, claiming that the measure violates the General Agreement on Tariffs and Trade "as well as the WTO's Trade Facilitation Agreement." Canada said that the U.S. measures "appear to be inconsistent with the United States' obligations" under GATT and TFA provisions.
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President Donald Trump initially imposed the tariffs on March 3 but backtracked after pressure to exempt first USMCA-qualifying cars and then all Canadian goods which qualify for USMCA preferences (see 2503060005). The president invoked the International Emergency Economic Powers Act as the legal basis for the tariffs, claiming that the duties are needed to address the influx of fentanyl from Canada across the northern border.
In its request for consultations at the WTO, Canada alleged that the tariffs violate Articles I, II, and V of the GATT. The duties cut against Article I, since they fail to "immediately and unconditionally" offer "advantage, favour, privilege or immunity" to Canada by the U.S. with respect to "customs duties and charges of any kind," Canada said.
Canada said the tariffs violate Article II, since they are imposed in excess of the U.S.'s tariff concessions and commitments to the WTO and its members. It said the U.S. fails to treat Canadian products no less favorably than products from other WTO members.
Finally, it said the tariffs violate Article V, "as the measures at issue apply a customs duty to goods in transit," and violate TFA Article 7 as they fail to provide "for a de minimis shipment value or dutiable amount for which customs duties and taxes will not be collected."
In a move related to the Trump tariffs announcement, China revised its February dispute (see 2502050032) at the WTO to reflect the additional 10% tariff levied on its goods.