Why Is the U.S. Renegotiating Its WTO Commitments?

The latest U.S. salvo against the World Trade Organization is aimed right at the core of the global trade body’s mission to keep a lid on tariffs and prevent them from gumming up global commerce. Each country that joins agrees to cap its import levies at so-called bound rates, which establishes a ceiling for the range of tariffs that nations may legally impose on each other. That means some WTO countries have higher tariffs than the U.S. and some have much lower ones, a system the Trump administration says is no longer fair. While U.S. trade officials say their goal is to reduce all WTO members’ tariffs down to zero, critics worry the plan could trigger tit-for-tat measures that disrupt trade at a time when the world economy least needs it.

Bound tariff rates are the maximum duty levels that governments apply to imports from other WTO members. Each country agrees to these commitments when they join the WTO. Nations are permitted the flexibility to apply lower tariff levels to certain imports but they may not exceed their bound limits.