White House reporter Jonathan Swan has leaked a draft copy of a bill, ordered by President Trump himself, that would permit the US to effectively “walk away” from its commitments to the World Trade Organization.
The “United States Fair and Reciprocal Tariff Act” if passed, would allow the President to ignore two principles that are fundamental to the WTO:
- The “Most Favored Nation” (MFN) principle that countries can't set different tariff rates for different countries outside of free trade agreements;
- “Bound tariff rates” — the tariff ceilings that each WTO country has already agreed to in previous negotiations.
“It would be the equivalent of walking away from the WTO and our commitments there without us actually notifying our withdrawal,” a source familiar with the bill said.
This stunning piece of legislation would give Trump license to raise U.S. tariffs at his discretion, without congressional consent or adherence to international rules.
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