Reciprocating to the Reciprocal Tariffs under the WTO

The reciprocal tariffs imposed by Trump on practically the entire world violate the rules of the World Trade Organisation (WTO) and the United States’ commitments thereunder. The tariffs might be paused for now, but there is no guarantee they will not be reinstated. This grants affected countries the legal right to retaliate under the WTO framework. This blog examines the avenues they could pursue and their potential consequences.

Dispute Settlement

The U.S. imposition of reciprocal tariffs likely violates several core WTO obligations, including Articles I and II of the General Agreement on Tariffs and Trade (GATT) which dictate that the same tariffs should be applied to all WTO Members and set and applied transparently. Affected parties—such as the EU or the UK—could contest these violations by launching a formal dispute under the WTO’s Dispute Settlement Understanding (DSU). A panel established under the DSU may require the United States to remove the inconsistent measures, failing which, retaliation could be authorised.

However, the risk remains that the United States could appeal any adverse panel decisions into the void. The crisis at the Appellate Body ensures that there is no resolution of any appeals anytime in the near future, thereby delaying and depriving the complaining parties of any retaliatory measures.

Moreover, the entire dispute resolution process—including initiating consultations, forming a panel, and waiting for a decision from the panel—is inherently protracted, potentially dragging on for years. This extended timeline, combined with the U.S. ability to nullify panel rulings by appealing into the void, renders the WTO dispute settlement route a rather unattractive option for those seeking prompt retaliation.

Safeguard

An alternative option for the retaliating country is to characterise the reciprocal tariffs as a “safeguard” under the WTO Agreement on Safeguards. Under the Agreement on Safeguards, it is incumbent upon the country implementing the safeguard measure to classify it accordingly and notify other WTO members. The United States has not termed these tariffs as safeguards, and instead, has pursued these measures as necessary to protect its essential interests under Article XXI of the GATT. However, the UK could still argue that the tariffs effectively function as a safeguard. This argument would be based on the interpretation that in substance, the tariffs meet the definitional criteria of a safeguard—inter alia, the tariffs modify or withdraw a concession under Articles I and II of the GATT, and are aimed at preventing or remedying serious injury to domestic industries. By considering the tariffs as safeguard measures, the United Kingdom could invoke Article 8 of the Agreement on Safeguards and pursue retaliatory action. The advantage of classifying the tariffs as a safeguard is that the procedural requirements of consultations and any potential retaliation can be undertaken in a very short time period (a few months).

However, the legal clarity on this issue remains uncertain and unresolved. The EU responded to the U.S. Section 232 tariffs on steel and aluminium imposed by the Trump administration by considering them safeguards, both in 2018 and again in 2025. Likewise, Turkey adopted a similar approach to the same Section 232 tariffs on steel and aluminium in 2018 by classifying them as safeguards and imposed retaliatory tariffs. Turkey’s retaliatory measure was challenged by the United States and a panel concluded that the U.S. measures did not constitute a safeguard, thereby voiding the ability of Turkey to take action that was conditional upon the U.S. measure being a safeguard. Turkey subsequently appealed the panel’s decision into the void, thereby leaving the legal question unresolved. While the uncertainty over the precise legal interpretation remains, the ambiguity itself creates a strategic opportunity for retaliation that countries may exercise against the United States without overtly violating WTO rules, at least for now.

Security

The tit-for-tat approach, a nuclear option, is immediate retaliation and justified under “national security” grounds of GATT Article XXI. This approach, in theory, would allow for immediate retaliation on the same grounds as claimed by Trump in imposing the reciprocal tariffs. However, this approach should be considered as a last resort, a Trump card of sorts (pun intended). Under the WTO, national security in Article XXI is narrowly interpreted and would not encompass situations or instances like this. The United States has consistently argued that national security under Article XXI should be ‘self-judging’ despite the Appellate Body rejecting those claims.

Other WTO members, however, do not share the U.S. view and ascribe to the WTO’s narrower interpretation. Retaliating on national security grounds would erode the understanding of the meaning and scope of Article XXI supported by the UK and others. Such an action would undermine the continuity and stability of the rules-based international trade order as it opens a Pandora’s Box for everyone to impose WTO-inconsistent measures under the guise of national security, starting a race to the bottom and eroding the rules-based process in the long term.

If a country is committed to pursue retaliation within the established rules-based framework of the WTO, then resorting to unilateral measures on identical grounds as those underlying the U.S. tariffs is contrary to such a commitment and sets an unwanted precedent.