Donald Trump’s controversial new
tariffs could be the start of an all-out war on the
World Trade Organisation (
WTO), a prospect causing officials in
Brussels to lose sleep and scramble for a response.
Donald Trump, after first aggressively introducing tariffs on steel and aluminium, is now speaheading an attempt to cripple the WTO's appellate courts.
The courts settle international trade disputes but Mr Trump and his trade officials believe the organisation goes too easy on China.
Washington may block the appointment of new judges next year, a move which would paralyse the system and undermine the WTO.
The EU, who are represented as a single bloc within the WTO, are concerned any attack on the organisation could handicap global economic growth - especially in Europe, which is already rattled by
Brexit.
One Brussels officials confirmed Mr Trump’s attack was the subject of a high-tension EU tension last month, attended by a despondent European Commissioner for Trade Cecilia Malmstrom.
One official told Politico: “Malmstrom was very, very pessimistic about the appellate body and said that Trump wants it to fail.”
Ms Malmstrrom is believed to have warned officials in the room there is no “common solution” to the stand-off.
And the WTO itself has warned the situation is of “grave concern” with the need for an urgent solution.
Director general Roberto Azevedo told Politico: “The dispute settlement system is a fundamental pillar of the WTO.
“Without an impartial and effective path for resolving disputes you would very quickly see members take matters into their own hands leading to a dangerous cycle of retaliation and counter-retaliation.
“The current situation is of grave concern. We need to find a solution quickly.”
The US said in its annual trade report the WTO is “undermining” the country’s ability put America first.
The United States Trade Representative said: “The WTO is undermining our country’s ability to act in its national interest.
"First among those concerns is that the WTO dispute settlement system has appropriated to itself powers that the WTO Members never intended to give it.”