Mexico initiates WTO dispute, following Canada, EU

The World Trade Organization (WTO) on Thursday said Mexico has filed a formal complaint against the United States over steel and aluminum tariffs, following similar steps taken by Canada and the European Union.

In its claim, Mexico accused the U.S. of using national security as an excuse to impose 25 percent tariffs on steel and 10 percent tariffs on aluminum, saying the true motivation is economic.

“Clearly, the establishment of an additional import tax is intended to protect the United States industry from the economic effects of import,” the claim said.

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Trade rules give nations flexibility in imposing trade restrictions for national security reasons but not for economic protectionism. 

The WTO announced that it had circulated formal complaints from the EU and Canada on Wednesday.

Trump’s top economic adviser Larry Kudlow hinted Wednesday that the U.S. might not comply with unfavorable WTO rulings. 

“International, multilateral organizations are not going to determine American policy,” he said.

But a negative WTO outcome for the U.S. would open the path to punitive tariffs from U.S. trade partners. The EU, which is in the process of implementing retaliatory tariffs on $3.3 billion of U.S. goods, is preparing an even larger list of tariffs in the event that the WTO rules in its favor and the U.S. does not comply. 

Mexico and Canada have also imposed retaliatory tariffs on U.S. goods.