WTO finds USA tariffs on China breach trading rules

  • WTO finds USA tariffs on China breach trading rules

WTO finds USA tariffs on China breach trading rules

On Tuesday a panel of three trade experts said the USA violated worldwide rules when it imposed tariffs on Chinese goods in 2018. That means the United States can appeal the decision "into the void", said Timothy Keeler, a lawyer at Mayer Brown and former chief of staff for the U.S. Trade Representative.

The appeals court issues final rulings in trade cases and stopped functioning past year when the terms of two of its last three judges expired with no replacements.

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.

But the U.S. responded defiantly, blasting the organisation as "completely inadequate" in holding Beijing accountable. Trump has repeatedly claimed that the WTO treats the USA unfairly.

The panel was created in January previous year 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. He said the US had presented "extensive evidence" of China's intellectual property theft and the WTO has offered no fixes for it.

China had argued the United States tariffs violated GATT's most-favored treatment provision because they did not apply equally to other WTO member countries. The US can appeal the decision at any time within 60 days, an act which would essentially veto it, since Washington has hamstrung the WTO's appellate department by refusing to appoint a representative to it.

The dispute centers on the Trump administration's use of a 1970s-era USA trade law to unilaterally launch its commercial conflict against China in 2018. Trade Representative Robert Lighthizer insisted the U.S. must be allowed to "defend itself" against unfair trade practices and maintained the ruling would not affect Phase I of the proposed trade agreement between the United States and China.

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.

Though the use of Section 301 isn't unprecedented, the provision largely fell out of favor in the 1990s after the U.S. agreed to first follow the WTO's dispute settlement process before it triggered any retaliatory trade actions according to Section 301. That is because the Trump administration has threatened to use Section 301 to hit European goods with levies in retaliation over the taxation of digital companies in the EU.