GENEVA, Switzerland – World Trade Organization experts ruled on Wednesday that tariffs imposed by China on billions of US imports in retaliation for Washington’s tariffs on steel and aluminum violate international trade rules .
A WTO panel set up to help resolve one of many disputes amid the trade war between the world’s two largest economies has concluded that China’s ‘additional tariff measure is inconsistent’ with various articles of the General Agreement on Tariffs and Trade (GATT).
Beijing said it was studying the decision.
Washington, meanwhile, hailed the decision, with Sam Michel, a spokesman for the U.S. Trade Representative, saying he recognized China “illegally retaliated with bogus ‘safeguard’ tariffs.”
The case revolves around China’s decision in April 2018 to impose tariffs on 128 U.S. imports worth $3 billion, including fruit and pork.
READ: China imposes retaliatory duties on 128 US imports
The move came shortly after former US President Donald Trump’s administration announced steep tariffs on steel and aluminum imports from China and a number of other countries. country.
Marking a break with a decades-long U.S.-led free trade campaign, Trump justified the high tariffs by saying massive flows of imports into the United States threatened national security.
The administration of his successor, President Joe Biden, adopted a less combative tone but stuck to tariffs.
call in the void
Panels set up by the WTO’s Dispute Settlement Body to settle complaints over US steel and aluminum tariffs ruled late last year they violated also the rules of international trade.
Washington appealed these decisions, which also determined that the inconsistencies found were not justified by the security exceptions provided for in the GATT, because they were not applied in time of war or during a case of tension. serious international.
Wednesday’s panel ruling did not delve into whether Washington was justified in seeking national security exemptions.
But he acknowledged that the U.S. tariffs were imposed in evocation of such goals, not as so-called safeguard measures imposed to protect domestic industry.
It therefore found that an agreement authorizing retaliation against unfair safeguard measures did not apply in this case, as China had argued.
READ: China calls Washington a ‘tyrant’ at WTO trade disputes meeting
The panel recommended that “China bring its WTO-inconsistent measure into conformity with its GATT obligations”.
An official with China’s Ministry of Commerce said the ministry was studying the report and would act on it, in accordance with WTO rules, state media Xinhua reported.
The official, who has not been named, also demanded “that the United States immediately reverse the Section 232 measures on steel and aluminum that violate WTO rules”, according to the newspaper. .
Michel meanwhile insisted that “China’s decision to pursue this dispute highlights its hypocrisy in both suing the United States at the WTO and at the same time unilaterally retaliating with tariffs.”
“The panel correctly rejected China’s argument that the US actions under Section 232 are safeguard measures that can be ‘rebalanced’ under WTO rules. “
China can now appeal Wednesday’s decision, but it’s still unclear where the cases may go from there.
The WTO appeals tribunal – also known as the Supreme Court of World Trade – has been frozen since late 2019, after the United States under Trump blocked the appointment of new judges and demanded a sweeping overhaul.
By filing appeals in the void, countries can in effect block the ability of others to move forward and seek financial compensation for activities deemed illegal by the DSB.
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