WTO panel gives anti-Turkey judgement disapproving additional duties on US aluminium and steel

In a revolutionary decision by the World Trade Organization (WTO) dispute panel, Turkey finds itself compelled to rescind additional duties imposed on imports from the United States. This move has reverberations within the intricate web of global aluminium trade dynamics.

The panel's verdict stems from its determination that Turkey's retaliatory measures against U.S. steel and aluminium tariffs are at odds with WTO policies, marking a pivotal moment in the ongoing tapestry of international trade tensions.

What were the actual conditions under the WTO’s panel ruling?

The WTO panel's explicit recommendation on Tuesday mandates that Turkey align its measures with WTO obligations, explicitly addressing the additional duties it had imposed. These levies were a direct response to the United States' imposition of a 25 per cent duty on imported steel and a 10 per cent duty on imported aluminium, initiated under Section 232 of the national security investigation during the Trump administration. Enforced since March 2018, these U.S. tariffs have significantly influenced the global aluminium market, sparking contentious debates in international trade circles.

Was WTO partial to the Western front?

As part of a larger group, including the European Union, Canada, and Russia, the United States had initiated dispute settlement proceedings against Turkey. The WTO's ruling in favour of the United States carries substantial implications in the broader context of international trade disputes. Responding positively to the decision, Sam Michel, spokesperson for the U.S. Trade Representative (USTR), highlighted the inconsistency of Turkey's approach, stating, "Turkey's decision to pursue this dispute highlights the contradiction of both suing the U.S. in the WTO and subsequently unilaterally retaliating with tariffs."

What does Turkey think?

Turkey's reaction to the WTO ruling and the subsequent U.S. comments remains pending, as the Turkish permanent mission to the WTO in Geneva has not yet responded to requests for comments.

Will Biden follow Trump in making wise trade decisions? 

In a parallel development, the United States had previously agreed in 2021 to lift tariffs on E.U. imports, signalling a potential thawing of trade tensions with European allies. However, President Joe Biden's administration has opted to maintain the metals tariffs, a key element of Trump's "America First" strategy. This decision underscores the persistent complexity and sensitivity surrounding the global trade of metals, particularly aluminium—an indispensable material in various industries.

What does this mean for the global aluminium value chain? 

The aluminium industry, along with stakeholders in the alumina and bauxite sectors, keenly observes these developments. The WTO ruling not only impacts immediate trade relations between the U.S. and Turkey but also establishes a precedent in global trade policies, casting a significant shadow over the aluminium sector. If you are intrigued by the developments in the international aluminium industry, please spare some time to read AL Circle’s special report on Global Aluminium Industry Key Trends to 2030.