WTO Rules In Favor Of Canada In Tariff Dispute With United States

As Reuters reported, on July 13 the World Trade Organization (WTO) ruled that Canada has the right to impose tariffs on U.S. imports to ward off the threat of the United States penalizing Canadian manufacturers for alleged unfair subsidies.

The Canadian government brought the case to the WTO in 2016 because of a dispute regarding penalties the U.S. government had imposed on paper used to produce glossy magazines and catalogues. Two years later, in 2018, a WTO panel ruled that the United States’ penalties violated international trade law. An appeals body agreed two years after that ruling, “prompting Canada to request the right to impose tariffs on a specific amount of U.S. goods,” Reuters explained.

In its decision issued last week, the WTO offered the Canadian government that request and offered a formula to calculate the volume of U.S. imports in the event that the U.S. government imposes similar measures.

Click here to read the WTO’s decision.

In a statement, the Office of the U.S. Trade Representative called the decision “deeply troubling” and said it is another sign the WTO is in need of “meaningful reform.” (The statement also reiterated the Biden administration’s commitment to WTO reform.)

As a North American trade association, MSCI has not taken a stance on this matter. Connecting the Dots is merely reporting this information for MSCI members’ benefit. Additionally, as a reminder, in regard to penalties like the United States’ Section 232 tariffs on steel and aluminum, MSCI continually has argued that products from Canada and Mexico be exempt.