South Korea Issues WTO Challenge as Response to Trump’s Tariffs

After U.S. President Donald Trump put steep tariffs on washing machines and solar panels South Korea responded with demands for compensation at the World Trade Organization. Just two days after Trump signed the new tariffs into law, the WTO published South Korea complaints.

The president’s intention for the new law was to protect American jobs, but experts in the solar industry said that this would lead to thousands of layoffs and raise consumer prices drastically.

Trump’s administration project to help U.S. manufacturers raised concerns in U.S. Asian trading partners after the 30 percent tariff on solar panels was signed. South Korea’s demand was published under the WTO’s Safeguard Agreement, which requires a full trade dispute to be done.

Reuters reports that the agreement gives the United States 30 days to settle the matter, after which South Korea has a 60-day window to impose trade sanctions if the U.S. measures break WTO rules. It was not clear if the United States could challenge that assumption.

The U.S. still hasn’t complied with an earlier WTO ruling, this has made Seoul to start series of trade retaliations hoping to pressure Washington to stick to the trade accords.

U.S. Commerce Secretary Wilbur Ross ignored the threat of South Korea taking their case to the WTO.

“The fact that they may get a favorable decision (at the WTO) doesn’t mean that it’s a correct decision, but in any event, there’s been no decision yet so it’s a little bit too early to assume that the safeguards will be knocked out,” Ross commented.

According to Reuters, no country has ever negotiated a settlement under the WTO safeguard rules, and it was not clear if they could provide a quicker result than a full dispute, which could take three years or more, giving U.S. manufacturers a long period of protection from competition by their South Korean rivals.

The WTO rules dictate that a nation can put safeguards or temporary emergency tariffs in place in order to shield its domestic industry from a sudden, unforeseen and damaging surge in imports.