President Donald Trump's decision to impose a 25 percent tariff on steel and a 10 percent tariff on aluminum citing national security concerns has thus far drawn eight WTO complaints from some of its major partners, including China, the European Union and Canada. For its part, the U.S. has filed five complaints, crying foul over the retaliatory duties those countries have put in place.
Those cases, and the others that could pop up in the coming weeks, are likely to put a heavy tax on the WTO in the coming months.
Unlike a domestic court, the WTO cannot enjoin governments from imposing new restrictions while the legality of the measures get sorted out, leaving it in a struggle to keep the litigation up to pace with the latest round of barriers, according to former Australian WTO envoy Dmitry Grozoubinski.
"This kind of situation, what is happening now, the WTO was not designed to deal with," said Grozoubinski, who is now a managing director at the International Centre for Trade and Sustainable Development. "This is like playing a game of basketball and someone drives an M-1 Abrams tank onto the court. You can blow the whistle at it, but clearly they're no longer playing by the rules of basketball."
Part of the problem embedded within the WTO structure, according to Grozoubinski, is that the WTO's only mechanism for rewarding victorious parties is through the allowance of retaliatory tariffs. That remedy becomes considerably less effective when countries have already been proceeding with tariffs throughout the life of the dispute.
The countries challenging the steel and aluminum tariffs claim that the U.S. is using national security as a veil for economic protectionism and has violated basic WTO rules that bar the unilateral raising of tariffs.
In response, the U.S. has said that retaliatory duties imposed by those restrictions are violating the very same principles, while still defending the metal duties under the WTO's exception for national security concerns.
The entire situation has led to a chaotic layering of legal imbroglios at Geneva that may get worse before it gets better, according to George Washington University law professor Steve Charnovitz.
"We've never had this much disobedience, and so it would be a challenge for any court system, domestic or international ... [dealing] with multiple interacting cases at the same time," Charnovitz said. "That's not a fault of the WTO; the system doesn't work if everyone is a lawbreaker."
Others are more optimistic about the WTO's capabilities and its role in the burgeoning trade fight. Sidley Austin LLP partner Andrew Shoyer noted that even if the WTO is unable to deliver a satisfactory result for the countries at issue regarding their goods, there is value in seeing the dispute through to the conclusion.
Any case against the U.S. tariffs will turn on the scope of the WTO's exception for national security rules, which has never been ruled on by a dispute settlement panel. Countries have been reluctant to test those waters, but that doesn't mean the WTO is incapable of meting out justice, Shoyer said.
"If there is a question of abuse of an exception, whether it's public health or environmental or national security, that is indeed what the WTO is there to do," he said. "Those things are really critical, and trying to make those balances work is what the WTO is supposed to do. I believe that the institution is strong enough to resolve these kinds of disputes."
Whether or not the WTO was designed to handle a situation like the one unfolding around the metal tariffs, most experts agree it certainly will have trouble doing so today as the U.S. spearheads a campaign to starve Geneva's dispute settlement functions.
For over a year, the administration has blocked new appointments to the WTO's Appellate Body, which has the last word on all disputes brought in Geneva. Because of the U.S.-led stonewalling, the Appellate Body is operating with just four of its seven seats filled, and the administration has shown no signs of changing course.
"It is passing ironic that the United States should be piling additional cases onto a dispute settlement system that it has been doing its best to grind to a halt," former Appellate Body Judge James Bacchus told Law360.
The Appellate Body was struggling with lengthy delays and procedural snags even before the U.S. began to line up against the appointment of new judges, and the escalation of the metal tariff-adjacent disputes will only bring that reality into sharper focus.
"Will there be judges to judge the cases? Will those judges have the personnel and resources they need to judge them expeditiously? These are real questions given the current slowdown in WTO dispute settlement," Bacchus said.
It's rare that WTO cases proceed all the way to the retaliation stage, as members on the losing end normally either rescind their faulted trade restrictions or strike some political arrangement with the victorious party to make the case go away.
Through that lens, much of the hand-wringing about the WTO's effectiveness to resolve the metal tariff fight is academic. The cases take years to complete, and if a new president replaces Trump, that administration might be amenable to removing the duties before the panel even completes its work.
But the questions will persist, and WTO observers are keen to see whether and how Geneva's legal apparatus will sort out a trade fight unlike any other in its 23-year history.
--Editing by Brian Baresch and Alyssa Miller.
Clarification: This story has been updated to clarify that the WTO's review of the national security exception has not yet led to a full ruling.
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