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17 July 2019

Trade Defense Remedies: Hot Topics of 2018

Source: ULF


2018 saw a variety of protectionist sentiments around the globe. Taking into account that trade defense remedies are protectionist measures directly allowed in the WTO, naturally enough 2018 demonstrated the growth of different investigations and applied remedies. Specifically, as indicated in the WTO report on G20 trade measures’, the first six months of 2018 saw a 23% rise in the number of investigations initiated by G20 members compared to the previous six-month period (July-December 2017). In this article, our aim is to focus on the hottest issues in the field of trade defense remedies.

Global View

8 March 2018 was the starting point of the global trade war. This was the day Donald Trump imposed additional duties of 25% on steel imports coming into the US and 10% on aluminum products. The duties were imposed under Section 232 of the USA Trade Expansion Act of 1962, which allow for the imposition of certain trade restrictions to limit imports that threaten to impair national security. These measures apply to Ukraine as well as on a general basis.

What matters is that such measures, being similar to safeguard measures in nature, went beyond the WTO’s established mechanism and the safeguards procedures. The introduction of the above measures raised unprecedented concerns from other countries where metallurgy industries suffered from USA trade restrictions. Nine WTO members” initiated disputes against the US, claiming the measures were not consistent with WTO agreements.

US tariff restrictions aimed at the import of steel products triggered subsequent safeguard investigations in other countries to protect domestic producers against the anticipated restructuring of trade flows and surplus of metal supply on global markets. As of the beginning of 2019, investigations had been initiated by the EU, Canada, Turkey and the Eurasian Economic Union. Some countries (the EU, Canada and Turkey) have already applied provisional measures*. Notably, Ukrainian products have been excluded from the provisional measures applied by Canada and partially excluded from the measures applied by the EU (only 14 of 28 product categories apply).

Though investigations initiated by other countries are in line with the WTO Agreement on Safeguards, the various measures against steel products applied or offered have significantly stirred the international market. This is an unusual situation as WTO members such as the EU, USA and China have only previously applied safeguard measures in 2002-2005 due to their extraordinary nature and very high standard of proof.

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