More broadly, the decision to impose tariffs on the basis of national security carries grave risks for the international trading system. Foreign governments could, and probably will, challenge these tariffs at the World Trade Organization. However, there is a broad and vaguely worded exception for security issues in WTO rules, which gives a lot of deference to governments who invoke this justification. As a result, the U.S. might be able to avoid a WTO ruling against it.
But a win in such a case could lead to a much broader loss for the trading system. If the U.S. invokes national security here, on such a flimsy basis (the U.S. still produces a lot of steel and aluminum, and many imports come from trusted alliessuch as Canada, South Korea and Mexico), other countries are likely to follow suit and copy this approach.
Governments are constantly looking for a rationale to justify their protectionism. To date, everyone has generally avoided the open ended loophole of “national security” as a justification. But with the U.S. having opened the door, other governments may decide to rush through. We may spend the next few years fighting off a proliferation of trade restrictions justified as national security measures.
President Trump seems to truly believe in his cause, and it may take actual implementation and subsequent failure of a protectionist trade policy to cure him of his misconceptions. Nevertheless, there is still time to push back. As of right now, these tariffs are just words. Trump said some things, but no action has been taken. As a result, it is worth it for everyone to make their case against these actions.
Other governments can make clear to the Trump administration how serious they are by announcing possible retaliatory measures now. Congress can assert its constitutional power over trade, through direct communication with the White House, and even through legislation designed to take back some power it had previously delegated to the executive branch. And the broader business community needs to make clear to the administration how badly it could be hurt by this.
There has been lots of talk of “trade wars” recently. This may be the start, but let’s keeping fighting for peace nonetheless.