WTO finds United States tariffs on China breach trading rules

Cornelia Mascio
Settembre 15, 2020

The Trump administration's 2018 tariffs on Chinese goods violated an worldwide trade treaty, the World Trade Organization has ruled, finding in China's favor.

Washington has imposed levies on US$400 billion (S$545 billion) in Chinese exports.

The panel found that the duties were inconsistent with trading rules because they applied only to China and were above the maximum rates to which the United States had committed.

"Panel recommends that the United States bring its measures into conformity with its obligations.", the report said.

The US on Tuesday slammed the decision - and the WTO itself - as "completely inadequate" in holding China "accountable" for its alleged trade transgressions.

China's Ministry of Commerce said in a statement on Tuesday that it "appreciates the objective and fair ruling made by the expert group". Trump has repeatedly claimed that the WTO treats the US unfairly.

The panel was created in January a year ago to review Trump's decision to hit China with the tariffs in 2018, which marked the beginning of a trade war between the world's two largest economies.

"Although the panel did not dispute the extensive evidence submitted by the United States of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct".

"This panel report confirms what the Trump administration has been saying for four years: The WTO is completely inadequate to stop China's harmful technology practices", said US trade representative Robert Lighthizer in a statement.

The US said the duties were a response to China's state-sanctioned technology theft, subsidies and other "unfair practices" and allowed under 1970s-era trade rules.

However, Washington can effectively veto the WTO decision by lodging an appeal at any point in the next 60 days.

China claimed the tariffs violated the WTO's most-favored treatment provision because the measures failed to provide the same tariff treatment that the United States provides to imports of all other WTO members. It also claimed the Trump administration had violated a dispute-resolution provision that requires countries to appeal to the WTO to settle disputes before slapping retaliatory tariffs on another country.

The Trump administration has justified the sanctions under Section 301 of the Trade Act of 1974, once a common tool used by the US government to impose sanctions - and recently revived by Trump.

In its decision, the WTO's dispute settlement body ruled against the US government's argument that China has wrongly engaged in practices harmful to USA interests on issues including intellectual property theft and technology transfer.

WTO's dispute settlement process before it triggered any retaliatory trade actions.

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