Architect to Arsonist: The United States’ Use of the National Security Exception in the World Trade Organization
After World War II, the United States spearheaded the liberal international order and pursued its global diffusion as the dominant political and economic system, promising to satisfy human needs through freer trade, multilateral institutions, and democracy. The World Trade Organization (WTO) was born from the order in the pursuit of lessening trade barriers, creating a predictable globalized economy, and establishing an official legal foundation for international trade. This delicate global trading system thrived only to be later challenged by the very nation responsible for its rise, primarily through a recent manipulation of the national security justification, addressed in Article XXI of the General Agreement on Tariffs and Trade (GATT), which permits a country’s exception from WTO legal regulations when necessary to protect essential national security interests. The national security exemption in trade is further represented in U.S. courts through Section 232 of the Trade Expansion Act of 1962. The United States’ recent manipulation of the national security exception upheld in the WTO’s Article XXI of the GATT, as well as the U.S.'s Section 232 of the Trade Expansion Act of 1962, violates WTO international trade law obligations and undermines its dispute settlement system.
The U.S. utilization of the national security exception in the 2018 tariffs undermines broader WTO trade obligations of non-discrimination and decreased trade barriers. Trade without discrimination and the reduction of trade barriers are the foundational principles that WTO legislation protects. However, the WTO permits an exception to its own policy in Article XXI of the GATT, allowing any member of the WTO to oppose WTO regulations when taking actions considered necessary to protect its “essential security interests,” particularly during a “war or other emergency in international relations.” The security exception is further implemented in U.S. tariff policy with Section 232 of the Trade Expansion Act of 1962 , allowing the President to impose restrictions on imports if the Secretary of Commerce determines that a good’s import quantity or circumstances “threaten to impair” U.S. national security. These two policies permit a country’s divergence from legal standards in trade policy and the cooperative goal of the WTO, but only in extreme circumstances such as war.
The United States invoked the national security exception in 2018 when instituting tariffs on steel and aluminum. These 25% tariffs on steel and 10% tariffs on aluminum contradicted both the principle WTO obligations of non-discrimination and decreased trade barriers, by allowing temporary tariff exemptions on U.S. allies (Canada, Mexico, European Union, Argentina, Brazil, and South Korea) and a full tariff exemption for Australia. The national security exception in Article XXI of the GATT is not designed to shield domestic industries from the threats of international trade but is narrowly defined to cover situations such as armed conflict and an international relations emergency. An overuse of the national security exception paves the way for ineffective policy, allowing recurring discrimination and trade barriers.
Several countries filed complaints against the U.S. for its 2018 tariff policy through the WTO’s Dispute Settlement Understanding, established in Article III of the Marrakesh Agreement, the founding document of the WTO. The Dispute Settlement System is responsible for reviewing and preventing a country from imposing a trade policy that does not align with WTO regulations. In December of 2022, the WTO panels ruled that U.S. 2018 tariffs on steel and aluminum violated GATT obligations and did not meet the "emergency in international relations” standard. The U.S. rejected the WTO ruling and simply claimed that the WTO bodies had no authority to review national security measures taken by its members. Its defense directly contradicted the 2019 WTO case, Russia - Traffic in Transit, which held that the national security exception was not self-judging and can be reviewed to ensure extreme conditions exist and members are acting in good faith. U.S. rejection and recent tariff policy, therefore, initiates a double consequence, which includes improperly implementing the national security exception and disregarding WTO obligations and neglecting the dispute settlement process, responsible for upholding the values of the WTO.
In addition, the U.S. has blocked all appointments or re-appointments to the WTO dispute settlement mechanism, the Appellate Body, since 2017, preventing any member from carrying out dispute cases against the national-security defense. Article 17 of Annex 2 of the Marrakesh Agreement outlines the Appellate Body within the Dispute Settlement System to hear appeals from panel cases. Without an effective mechanism to review and lodge complaints, no legal system prevents a country from implementing trade policy that violates WTO legislation and the mission of a cooperative multilateral trading order. 2025 U.S. tariffs exhibit these risks as they built upon 2018 steel and aluminum tariffs by again invoking the national security exception, despite previous WTO ruling. The U.S. announced 25% steel and aluminum tariffs on February 10, 2025 for all countries and increased the tariff to 50% for all countries except for the UK on May 30 2025. Section 232 of the Trade Expansion Act of 1962 was cited in permitting the substantial tariffs, stating that the increased tariffs were necessary to protect the “competitiveness of the United States steel and aluminum industries.” Similar to the 2018 tariffs, many WTO members, including China, India, Japan, the European Union, and Canada have initiated WTO dispute cases, lodged complaints, or cited inconsistencies with WTO rules in response. None of these cases have reached any final resolution due to the incapacitated Appellate Body and countries have instead turned to global retaliatory tariffs.
Recent U.S. trade policy is particularly impactful and unexpected in the context of historical U.S. trade policy. Initially an advocate for open trade policy at the end of World War II, recent U.S. administrations have resorted to protectionist tariff policy, enabled through The Reciprocal Trade Agreements Act (RTAA). Signed into law in 1934, it grants the U.S. president control of tariff negotiations through executive agreement and without Senate approval. As a result, U.S. trade policy reflects the priorities of executive administrations rather than stable, institutionalized rules. Given its entrepreneurial role in the WTO’s creation, the U.S. maintains a unique position to set the standard and legitimacy of international trade law within a multilateral institution. As Section 232 of the Trade Expansion Act of 1962 has been increasingly cited in U.S. tariff policy, the national-security notifications within the WTO reached its all-time high in 2024 at 95 notifications. This contrasts with its rare use in the first 70 years of GATT/WTO establishment, indicating a reinforcing cycle as a result of lacking enforcement power, U.S. policy, and reciprocal tariffs.
As Foreign Affairs has noted in a recent analysis by Michael B. G. Froman, the national security exception upheld in Article XXI of the GATT and Section 232 of the Trade Expansion Act of 1962 violates WTO international trade obligations, undermines its dispute settlement system, and in doing so destabilizes its mission. This shift in U.S. international trade policy has emerged throughout various administrations and reflects a broader debate on whether the WTO, in its current form, serves its members. As the future of international trade law becomes increasingly uncertain and legal accountability diminishes, WTO authority erodes, exposing that international trade law is often only as strong as the cooperation and values of the states that uphold it.