As expected, the European Union, China, South Korea and Taiwan have formally requested WTO consultations with the United States over the Trump administration’s Section 201 global safeguard measures on imports of certain solar cells and washing machines. The countries requested consultations under Article 12.3 of the WTO Agreement on Safeguards, which entitles affected countries who are exporters with a “substantial interest” in the products concerned to have an “adequate” opportunity for prior consultations before application of the safeguard measure can be imposed by the United States.
While requests for consultation are not formal challenges and do not initiate the WTO’s dispute settlement procedures, such consultations are often the precursor to a further action. WTO rules allow for safeguard measures such as temporary restrictions on imports; however, they also require the country imposing such measures and import restrictions to maintain balanced trade with those countries affected. It is possible that if consultation fails to resolve concerns, these countries could eventually retaliate by imposing their own trade restrictions.