China seeks US$2.4 billion in penalties against U.S. at WTO

Cornelia Mascio
Ottobre 22, 2019

China seeks to implement $2.4 billion worth of retaliatory sanctions against the U.S., stating that their trade partner hadn't fully complied with a WTO ruling dating back to the previous American administration, which required the cancellation of tariffs on solar panels, wind towers, steel cylinders, and aluminium extrusions.

The WTO's Dispute Settlement Body (DSB) will review the case which dates back to the Obama-era on October 28, a document published on Monday showed.

The WTO news comes as U.S. China have been moving gingerly to resolve a trade war that has dragged on nearly two years and resulted in hundreds of billions of dollars of tit-for-tat tariffs.

At issues in the dispute are countervailing measures imposed by the USA that affected items including thermal paper, pressure pipe and kitchen shelving.

The United States and China have imposed a series of tit-for-tat tariffs over the past 15 months that have roiled financial markets and resulted in a sharp drag on global economic growth.

The request stems from a July WTO appellate decision in a case dating to before the Trump administration, and unrelated to the tariffs it has slapped on Chinese goods. That could open Washington to Chinese sanctions if it does not remove certain USA tariffs that break the watchdog's rules.

He said deputy-level meetings took place on Monday, and he and Treasury Secretary Steven Mnuchin would speak with their counterparts on Friday. The United States could challenge the amount of retaliatory sanctions sought, which could send the long-running dispute to arbitration.

The United States had failed to comply with the DSB recommendations and rulings within the specified period and no agreement on compensation had been reached, it said.

The dispute stems from a 2012 complaint by the Chinese against US countervailing duties - tariffs meant to counter subsidies placed on certain goods by the Chinese.

Washington criticized that decision, which it said recognizes that China uses state-owned enterprises to subsidize and distort its economy but contends the USA must use "distorted Chinese prices" to measure subsidies.

But the ruling also said the United States must accept Chinese prices to measure subsidies, even though USTR viewed those prices as "distorted".

Trump said the deal includes China agreeing to raise its US agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services.

Meanwhile, U.S. Commerce Secretary Wilbur Ross is throwing doubt on when that trade deal announced earlier this month will be signed.

"The deal with China's coming along very well".

US Trade Representative Robert Lighthizer told reporters the administration still aimed to finalise a deal on the first phase of the deal in time for the Asia-Pacific Economic Cooperation (Apec) meetings in Chile on Nov 16 and 17, but said there were still outstanding issues to resolve.

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