Canada has filed a complaint with the World Trade Organization (WTO) in response to President Donald Trump’s decision to impose a 25% tariff on car imports from the country.
On Thursday, Canada requested consultations, marking the initial step in a formal trade dispute process within the WTO framework. The organization confirmed the complaint on Monday.
The WTO reported, “Canada has requested WTO dispute consultations with the United States regarding U.S. measures that impose a 25 percent duty on automobiles and automobile parts from Canada.”
Canadian officials assert that the tariffs violate prior legal agreements established under the General Agreement on Tariffs and Trade (GATT), a framework designed to regulate the use of tariffs among trading partners and to mitigate the risk of trade wars during times of economic tension.
The WTO elaborated, stating that Canada contends the U.S. measures are inconsistent with its obligations under various GATT provisions from 1994.
Finance Newso News Digital has reached out to the White House, the U.S. Chamber of Commerce, and the Canadian government for further clarification on the matter.
The WTO further indicated that consultations would provide an opportunity for Canada and the U.S. to amicably resolve their differences without resorting to litigation. Should a resolution not be achieved within a 60-day timeframe, Canada may request a panel’s adjudication.
Last Thursday’s request from Canada follows a prior complaint filed with the WTO over a similar 25% tariff imposed by the U.S. on steel and aluminum imports.
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In related news, China submitted its own complaint to the WTO the previous Friday, countering Trump’s February tariffs by enacting a 34% levy on U.S. goods. The U.S. responded with threats of another 34% tariff on Chinese imports, potentially elevating the total tariff rate to 70%.
The Chinese Commerce Ministry labeled the U.S. tariffs as a manifestation of unilateralism, protectionism, and economic bullying that contravenes WTO regulations.
The U.S. government’s strategy regarding these consultation requests remains uncertain, especially since the WTO’s dispute resolution mechanism has reportedly been inoperative since the outset of Trump’s first term, as outlined by the Wall Street Journal.
On Sunday, Trump reiterated his stance of not engaging in negotiations with countries like China until trade deficits are adequately addressed.
Finance Newso News’ Greg Norman contributed to this report.
