Does the WTO control tariffs? I just read an article where South Africa put a 10% tariff on Chinese steel because it is cheaper than domestic, so that interest rate of domestic steel rise. Did...

Does the WTO control tariffs? I just read an article where South Africa put a 10% tariff on Chinese steel because it is cheaper than domestic, so that interest rate of domestic steel rise. Did South Africa put 10% because they want that amount or because they can't put more than 10% ?

Article http://mobi.iol.co.za/#!/article/steel-sector-gets-tariff-protection-1.1907199

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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You are right to say that South Africa imposed a 10% tariff on steel because that is what they are allowed to do by the World Trade Organization (WTO).  WTO rules allow 10% tariffs.  However, South African steel companies are asking their government to impose more tariffs because they feel that they are still unable to compete with low cost imports from China.

The WTO does control tariffs to a degree.  That is, the WTO can only control tariffs to the extent that countries give it the power to do so.  South Africa is a member of the WTO and therefore must abide by its rules.  Countries that are not part of the WTO do not have to obey those rules.

So, the answer to this is that the WTO does control tariffs in the sense that it enforces treaties that countries have agreed to.  WTO rules say that countries may impose 10% protective tariffs, which is why South Africa imposed that  particular level of tariff.

 

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