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Steel and aluminum tariffs are a 'complete violation of WTO rules': Former deputy trade representative

Key Points
  • The proposed steel and aluminum tariffs would have implications for "undermining the credibility of the entire global trading system," says Matt Gold, international trade law expert.
  • The WTO would collapse if the tariffs were approved, or if the U.S. left the organization, he says.
  • Gold says the security risks for steel and aluminum do not rise to the level of an international emergency.
Trump's tariffs are a violatin of WTO rules, says trade expert

The potential steel and aluminum tariffs are a "complete violation of WTO rules," said Matt Gold, the former U.S. deputy assistant trade representative for North America under former President Barack Obama.

Thursday, President Donald Trump announced his proposed 25 percent steel and 10 percent aluminum tariffs would go into effect next week. The president has said the move is an effort to improve national security.

While nothing has been signed into law yet, Gold, who is now an adjunct professor of law at Fordham University, said the tariffs — if approved — are complete violations of international trade agreements and would affect the entire global economy. The move might even prompt other countries to take similar actions.

"[The tariffs have] severe implications for undermining the credibility of the entire global trading system," Gold told CNBC on "Closing Bell" on Friday. "It will bring litigation to WTO by our trading partners for violation of those rules."

Leaving the WTO is simply not an option for the U.S., said Gold, calling the consequences of such a move "truly catastrophic."

"If the WTO collapsed, which it would if we pulled out, it wouldn't just be the U.S. losing its exports," Gold said. "The entire global economy would fracture."

The World Trade Organization is an international organization established in 1995 to regulate global trade. Membership in the organization is made up of approximately 160 countries, including the United States, which Gold refers to as "the architect of the entire global system."

The WTO did not respond to a request for comment.

While Gold said there is in fact basis for national security concerns over imposing barriers, the concerns do not rise to the level of an emergency. Possible legitimate reasons would include time of war or an emergency in international relations, he said.

"And we have neither right now," Gold said.

"In order for the executive branch to impose trade barriers over and above the normal ordinary customs duties," he said, "we have to be in one of five situations: The goods are being dumped, the goods are subsidized, the goods have suddenly surged, national security or we're retaliating against another country for violating rules against us … and automobiles from Germany are not going to fit into any of those five."