On Monday 19 March, the German economic research institute, ifo warned of the risk that the protectionism triggered by the American President, Donald Trump, on imports of steel and aluminium to the United States could spread to other countries and other sectors, which could undermine the World Trade Organisation (WTO) and seriously jeopardise the progress achieved in liberalising world trade over the past decades.
“Trump's actions seem quite arbitrary”, states ifo, referring to the exemption for Canada, the largest steel and aluminium exporter to the US, with a value of $14.8 billion a year, and for Mexico, from the American texts taxes due to enter into force on 23 March, and the fate of the EU, whose exports of these products to the US are worth around $6.5 billion a year (including $3.1 billion for Germany and less than $1 billion each for France, Italy, the Netherlands and the UK), and which is in front of China ($3 billion a year).
It also describes as “dubious” the legal justification for the use of protective tariffs on steel and aluminium in the United States, as article XIX of the GATT allows this only if a sharp and sudden increase in import volumes can be determined. American imports of steel have risen sharply since 2009, but only to the level of 2006, i.e. before the economic crisis of 2008, and those of aluminium have been relatively stable over the longer term, the institute stresses.
However, ifo stresses that the impact of potential American customs duty on steel and aluminium from Europe will be limited, stressing that they will affect only 1.6% of total EU exports to the US, and 1.5% of Germany's. (Original version in French by Emmanuel Hagry)