Tariff Wars: Türkiye vs. USA And the WTO Dispute Settlement

Frederic Bastriat famously claimed that ‘’If goods do not cross borders, soldiers will.’’ Since trade as a social phenomenon provides incentives to maintain good relations between partners, it can be said that there is a negative correlation between free trade and conflicts. In addition to historical data, Prof. Patrick j. McDonald’s research empirically proved this point. Despite its advantages, uneven production and market standards may distort domestic markets of countries after uncontrolled flux of products from trading partners. Global trend towards maintaining that balance through the use of tariffs has been diversified after the introduction of antidumping rules and other safeguard mechanisms. To be able to effectively control rightful usage of these mechanisms, several global and regional platforms have been established including NAFTA, WTO/GATT, Court of Justice of the European Union and so on. This study explains the substantial legal issues of ‘Trump tariffs’ with the specific example of USA vs. Türkiye case under WTO dispute settlement understanding. The study claims, WTO Dispute Settlement Body has authority to inspect good faith application of article XXI of GATT 1944, ‘security exception’ clause. Inspected WTO case law and scholarly debates which proved this conclusion relevant has also revealed that US’ imposition of the tariffs under section 232 of US law does not constitute safeguard measures. Furthermore the thesis provides the justification, why the discriminatory application of the tariffs is against WTO principles along with International law.