White House Says There Is No Plan to Quit World Trade Organization

WASHINGTON (Bloomberg News/TNS) -

White House officials sought to ease concerns over a news report that President Donald Trump wants to withdraw the U.S. from the World Trade Organization, which would upend the global trading system.

Treasury Secretary Steven Mnuchin called the report an “exaggeration,” while White House legislative aide Marc Short said he’s unfamiliar with any plan to pull out of the Geneva-based group. A WTO official said Friday that the organization hasn’t heard from the U.S. about reconsidering its membership.

Axios news agency reported Friday that President Trump had repeatedly told top White House officials he wants to exit the WTO, citing unidentified sources.

The controversy capped a month when America’s major trading partners retaliated against U.S. tariffs by imposing restrictions of their own.

In the latest escalation of the global trade dispute, Canada said Friday that it would levy duties on $12.6 billion worth of American goods in response to American tariffs on steel and aluminum imports. U.S. tariffs on $34 billion worth of Chinese goods are to take effect July 6 and a further $16 billion in tariffs. China has said it would retaliate in kind.

President Trump says his tariffs are designed to protect domestic industries that have been hammered by an unfair global trading system. Trump has long criticized the WTO for allowing countries such as China to impose high tariffs on American goods such as cars even as its economy has matured, though as president he’s stopped short of pledging to withdraw from the group.

President Trump “has concerns about the WTO,” Mnuchin said Friday on Fox Business. “He thinks there’s aspects of it that aren’t fair.”

Short echoed Mnuchin in comments later. “The president has expressed frustrations with international organizations, from a sovereignty perspective,” Short said. “But I think that the president also believes that there’s extensive tariffs assessed on American products overseas. That it’s not a reciprocal tariff.”

Pulling out of the WTO would isolate the U.S. from the world economy, said Rufus Yerxa, a former deputy director general at the WTO. “If you want to change it, you have to make serious proposals, but you don’t just walk away,” he said.

While the U.S. can leave the WTO, it’s uncertain whether President Trump could do so without approval from Congress. Many lawmakers, including Republican proponents of free trade, would be likely to put up a fight. A U.S. withdrawal also would put U.S. exporters at risk, as other WTO members could raise tariffs on American imports. The U.S. would also forfeit any ability to overturn unfair trade practices in the WTO dispute-settlement system.

“Congress would not accept that,” said Bill Reinsch, senior adviser at the Center for Strategic and International Studies. “They are very well aware how it has benefited the U.S. When we file a complaint, we generally win.”

Still, Trump has made good on threats to pull out of other international agreements, including the Iran nuclear deal and Paris climate agreement. White House adviser Kellyanne Conway was less reassuring than her colleagues Friday that Trump wouldn’t withdraw.

“The president has made it very clear that he thinks that people who are members of a group like NATO should pay their fair share,” she said on Fox Business. “I think the World Trade Organization is another group that he’s said we should take a look at. I’ll leave any announcements to him.”