Emergency or economic leverage? New US tariffs under the WTO exceptions and their impact on Asia-Pacific
United States have imposed a 10% tariff on goods from China amid a synthetic opioid crisis, prompting a WTO dispute over whether the measure can be justified under general and security exceptions. Nikita Melashchenko explores this security response under international economic law and examines the potential implications for trade in the Asia‑Pacific region.
Comment: This commentary was prepared by Dr Nikita Melashchenko from the New Zealand Centre for International Economic Law (NZCIEL). The views expressed in this post do not necessarily reflect the position of other research affiliates.
Summary
- On 4 February 2025, the US imposed a 10% additional tariff on Chinese goods under the IEEP Act, citing a national emergency linked to synthetic opioids.
- China responded by requesting consultations at the WTO, prompting an analysis of whether the measure is justified under WTO general and security exceptions.
- Any measure claimed to be a general exception must have a clear nexus to its stated objective—whether protecting public morals, life or health, or ensuring compliance with domestic regulations. Broad, universal tariffs may not meet this strict requirement if they do not target specific risks.
- While Members enjoy significant discretion to protect their essential security interests, national emergencies such as the one claimed by the US must be objectively scrutinised. It will have to qualify as an emergency in international relations and as a plausible means for protection of the claimed security interest.
- Asia-Pacific countries, including New Zealand, Japan, and Singapore, should and likely will stress that WTO exceptions must be narrowly applied to avoid serving as a pretext for expansive, protectionist actions that could further destabilise the multilateral trading system—an outcome that would particularly harm small and trade‑dependent economies.
Background
On 4 February 2025, the United States imposed a 10% additional tariff on goods of Chinese origin (US President, Executive Order 14195). The measure, taken under the International Emergency Economic Powers Act, was justified by the US as a response to a “national emergency” linked to an alleged influx of synthetic opioids. In response, China filed a request for consultations under the World Trade Organization (WTO) dispute settlement framework (WTO, G/L/1561; WT/DS633/1). What stands out is not only the legal dispute that is about to unfold but also the curious mix of trade, national security, and public health issues that this dispute brings forward.
We analyse China’s request from the standpoint of both the general exceptions and the security exceptions found in WTO law. We will also consider how these issues resonate in New Zealand and across the Asia-Pacific region.
Tariffs for all kinds of emergencies?
At its heart, the US measure imposes an extra duty on all goods originating from China (EO 14195, s 2). The US contends that this measure is necessary to counter a national emergency linked to synthetic opioids (EO 14195, preamble). However, the rationale for employing such broad tariffs is not immediately apparent. The connection between imposing widespread tariffs on goods from China and addressing the risks associated with synthetic opioids remains questionable.
If the objective is to prevent China from worsening the US opioid crisis by increasing transaction costs in bilateral trade, one might have expected a more targeted approach—a response directly targeting the channels that facilitate the illicit trade. For example, rather than applying blanket tariffs across the board, the authorities could have opted for specific non‑tariff measures aimed at sectors more directly involved in the illicit trade or distribution networks. Such a focused response would arguably have been more comprehensible and proportionate to the actual risk at hand.
In the current dispute, however, the US is likely to invoke all available exceptions to justify the broad tariffs, while China is likely to argue that the measures fail to meet the objective tests established in previous disputes settlement reports. The debate is likely to centre (once again!) on whether the imposition of tariffs has a sufficiently clear and direct relationship with the objectives claimed (See US — Tariff Measures (China)).
Security exception is a shield, not a sword
WTO rules allow Members to depart from their trade obligations under certain circumstances. Therefore, the US measure is likely to be defended under the security exception found in Article XXI of the GATT. This provision allows Members to take any action they consider necessary for the protection of their essential security interests. However, even under this exception, WTO jurisprudence—as seen in Russia — Traffic in Transit—makes it clear that such measures cannot be entirely immune from review. While national security remains a sovereign matter, panels have asserted that the exercise of this discretion must be objectively scrutinised.
The most relevant question in the 2025 dispute is whether the US national emergency linked to synthetic opioids amounts to an emergency in international relations. This is not a given because the threshold for invoking the security exception is not non-existent. In the 2019 Russia — Traffic in Transit report, the panel found that the security exception was applicable in part because of the war between Russia and Ukraine. Whether a national public health emergency linked to synthetic opioids can be considered an emergency in international relations, or in the words of the panel whether it “involves a fundamental change of circumstances which radically alters the factual matrix in which the WTO-consistency of the measures at issue is to be evaluated” (para 7.108) is a question that the US will need to convincingly address.
During the COVID‑19 pandemic, similar debates emerged about whether a public health crisis could trigger the security exception. In discussions over vaccine distribution and intellectual property, experts stressed that invoking an “emergency in international relations” required more than a mere domestic health emergency—it demanded evidence that the international landscape had fundamentally shifted. As Professor Susy Frankel FRSNZ noted in the analysis of the COVID‑19 response, “the pandemic has created not only health but serious political and economic situations which are emergencies” (Frankel 2023, 19). However, if a country faces a severe shortage of vaccines during a health crisis, taking measures that might normally risk patent infringement can be seen as a reasonable step to secure enough vaccines (Ibid, 18). In a global emergency, such actions are not out of the ordinary—they would be expected to meet urgent public health needs. Still, whether COVID‑19 itself qualifies as an “emergency in international relations” is a highly contested issue, because it requires proof that the global situation has changed fundamentally, rather than just reflecting a domestic health emergency (Ibid).
Finally, under Article XXI(b)(iii), the critical review will likely focus on whether there is evidence to suggest that the US’s designation of its essential security interests was made in good faith, and whether the broad 10% tariff is not implausible as a measure to protect those interests. This is not a necessity test as applicable under the general exceptions, but rather a test of whether the measure is a plausible means to achieve the stated security objective. This is a lower threshold, but it still requires that the measure be rationally connected to the security interest claimed. It is not impossible for the US to justify the tariff under the security exception, but it will require more than a mere assertion of national emergency.
General exceptions are flexible and numerous but also require a clear nexus between the stated purpose and the measure taken
Another key provision illustrating the regulatory flexibility is Article XX of the GATT that permits measures aimed at protecting public morals or human, animal, or plant life or health, among other interests. Such exceptions, also known as general exceptions, require that the measures be both appropriately designed and proportionate to their intended purpose. Past WTO reports such as US – Tariff Measures (China) and EC – Seal Products have stressed that a genuine nexus between the measure and the protected interest must be established.
(a) Broad tariffs likely fail to uphold ordre public
Disputes invoking Article XX(a) require that measures be designed to protect public morals. In the 2020 US – Tariff Measures (China) dispute, the US argued that “a measure may be necessary to protect public morals without being limited to a product that itself offends public morals” (para 7.177). China, however, maintained—specifically during the design test—that Article XX(a) should not be read to allow measures targeting products that are not inherently morally offensive (ibid). The issue remains unresolved, but the panel in that dispute focused on how the specific tariff measures contributed to the declared public morals objective.
In the 2025 dispute, similar issues arise. The US justifies its broad 10% tariff as a response to a national emergency linked to synthetic opioids. The executive order emphasises the public health and national security rationale behind the action (EO 14195, preamble). Yet, as observed in the 2020 report, a tariff may not clearly correlate with the protection of public morals if there is no connection between the means and the ends (US – Tariff Measures (China), paras 7.236–7.237). The key challenge is whether this broad tariff measure was designed to shield society from moral harm by, for example, curbing the opioid crisis, or whether it simply serves as an economic lever to pressure China into policy changes or another trade deal, as previously suggested in the US public statement (Fact Sheet 2025).
(b) Broad tariffs are unlikely to safeguard human life and health
Article XX(b) provides an exception for measures necessary to protect life or health. However, any such measure must have a clear, direct connection with protecting human, animal, or plant life or health. In cases such as EC – Tariff Preferences —following the approach seen in US – Gasoline and EC – Asbestos—panels first determine whether the underlying policy of the measure falls within the range of policies designed to protect life or health. They then assess whether the measure is necessary to achieve that objective and whether it is applied in a manner consistent with the chapeau of Article XX. In general, a tariff designed primarily to adjust economic behaviour should fall short if it does not directly regulate a specific health risk.
In the 2025 dispute, the US justification is likely to rest on the claim that synthetic opioids pose a significant public health threat. However, imposing a broad 10% tariff raises doubts about the nexus to health. A more focused approach under Article XX(b) might have involved targeted import controls or stringent safety regulations for specific chemicals used in opioid production. Without a direct, focused linkage between the tariff and a specific health risk, it remains questionable whether the measure can truly be defended as necessary to protect human life or health.
(c) Broad tariffs likely fail to establish the linkage of compliance with domestic laws and regulations
Under Article XX(d), a measure may be justified if it is necessary to secure compliance with laws or regulations that are not inconsistent with WTO provisions. This allows a Member to take measures that help enforce domestic rules—for instance, customs or intellectual property laws—without undermining the overall multilateral framework. In various reports, panels have emphasised that such measures must have a rational connection with the regulatory objective. For the US tariff measure, if the rationale was to secure compliance with domestic legal requirements (say, by imposing higher transaction costs designed to encourage China to meet specific domestic regulatory standards), the measure would need to be closely tailored than a broad 10% tariff on all goods. In the 2025 scenario, it is hard to see how a general tariff directly enforces compliance with specific domestic laws or regulations, so such a justification may also be on shaky ground.
Necessity might be a hard sell
Even if the US can establish that the tariff measure falls within the scope of Article XX, it must still demonstrate that the measure is necessary to achieve the stated objective. The necessity analysis is about weighing and balancing. This includes evaluating the relative importance of the policy objective, the extent to which the measure contributes to that objective, its trade-restrictiveness, and whether there are less trade-restrictive alternatives available. While no one would contest the importance of addressing the opioid crisis, the necessity of a broad 10% tariff on all goods from China to achieve this goal is likely to be a hard sell. A blank tariff is as trade-restrictive as it gets apart from a complete ban, and each of the general exceptions requires a more targeted, proportionate response. Many less trade-restrictive alternatives—such as targeted import controls or enhanced safety regulations—could have been considered and arguably are available to the US within reasonable limits.
Arbitrary or unjustifiable discrimination?
Finally, the chapeau of Article XX requires that measures be applied in a manner that is not arbitrary or unjustifiable discrimination between countries where the same conditions prevail. In the 2020 US – Tariff Measures (China) report, the panel did not consider the US tariffs under the chapeau of Article XX, but the issue might be more relevant in the 2025 dispute, if the US succeeds in establishing that the tariff measure falls within the scope of the general exceptions. The US will need to demonstrate that the measure is not only necessary to protect public morals, life, or health, but also that it is applied in a manner that is even-handed and non-discriminatory. In general, this is possible, but will require more than a mere assertion of national emergency, because the analytical framework for this part of the test is quite demanding.
Implications for New Zealand and the Asia-Pacific region
For New Zealand and other Asia-Pacific economies, the outcome of this dispute—whether resolved through consultations or via a panel report—carries significant consequences. In the 2020 US tariffs case (WTO, WT/DS543/R/Add.1), New Zealand participated as a third party and took the view that broad, sweeping tariff measures should be closely scrutinised. New Zealand emphasised that WTO exceptions must be applied narrowly and in good faith to prevent protectionist abuse—an approach that remains vital in today’s context. For New Zealand, preserving a stable, rules‑based multilateral trading system is likely to stay essential—not only to safeguard its own economic interests but also to maintain predictable trade flows across the Asia-Pacific.
This perspective is shared by regional players such as Japan and Singapore. In the same case (Ibid), Japan has underscored the need for measures to be demonstrably linked to their stated objectives, requiring clear evidence that they are designed and, where applicable, necessary to protect legitimate public policy objectives. Meanwhile, in another case Japan and Singapore stressed that while Members enjoy significant discretion—especially under security exceptions—this discretion must be exercised in good faith and without importing non-economic considerations into the trade system ( WTO, WT/DS512/R/Add.1 ).
If the US is allowed to justify a broad 10% tariff under either the general or security exceptions without providing additional proof of its necessity, it could set a precedent encouraging similar expansive measures by major economies. Such a development would pose a risk to the balance of trade in the Asia-Pacific, potentially leading to unilateral actions that disrupt the stability and predictability upon which small, trade-dependent economies like New Zealand rely.
Moreover, this precedent may have knock-on effects for ongoing negotiations—both bilateral and multilateral—that aim to reform and strengthen trade rules. If broad exceptions become acceptable, future disputes could be resolved through measures that are less precise and more disruptive than what the WTO framework was intended to permit. This potential shift would not only affect trade flows in the Asia‑Pacific but also weaken the undermine confidence in a rules‑based system that underpins international trade, forcing policymakers to carefully assess these risks and potentially drive changes in ongoing negotiations or even prompt the renegotiation of existing trade agreements.
Ultimately, the collective regional stance—as reflected in New Zealand’s submissions and echoed by Japan and Singapore—reinforces that any invocation of WTO exceptions must be tightly confined to genuine security or legitimate public policy objectives. This vigilance is crucial to ensuring that the multilateral trading system remains a level playing field for all Members, preventing the economic interests of smaller nations from being subordinated to the strategic ambitions of larger economies.