Canada Opens WTO Dispute on US Autos Tariffs
Canada filed a dispute consultation request with the U.S. at the World Trade Organization on April 7, alleging that the U.S. government's 25% additional tariff on automobiles and automobile parts violate WTO obligations. The request said the duties "appear to be inconsistent with" U.S. obligations under Articles II and VIII of the General Agreement on Tariffs and Trade 1994.
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The additional 25% tariffs on cars and light trucks and cargo vans took effect on April 3, while the additional 25% tariff on parts, including engines and engine parts, transmissions and powertrain parts and electrical components, is set to take effect no later than May 3 (see 2503260077).
Canada said the duties likely violate Article II of the GATT for failing to provide Canada "treatment no less favourable than that provided in the United States' Schedule of Concessions." The duties also violate this article for imposing duties "in excess of the bound rates set forth" in the U.S. schedule of concessions, Canada said.
In its dispute settlement request, Canada also noted that Trump's auto tariffs provide that if CBP finds that the declared value of non-U.S. content of an automobile is inaccurate due to an "overstatement of U.S. content," the 25% tariff will apply regardless of the actual U.S. content.
The dispute consultation request said that this measure likely violates Article VIII of the GATT, since it imposes "substantial penalties for minor breaches of customs regulations or procedural requirements."