WTO finds US in breach of trade rules with tariffs on China

The World Trade Organization (WTO) has declared that the United States breached international trade rules by imposing multibillion-dollar tariffs on China.

In a 66-page report on Tuesday, the Geneva-based organization said the US duties broke trade rules because they applied only to China and were above the maximum rates agreed to by Washington.

The WTO’s three-member panel further said Washington had not adequately explained why its measures were a justified exception.

US President Donald Trump initiated a trade war with China in 2018 when he first imposed unusually heavy tariffs on imports from the country. Since then, the two sides have exchanged tariffs on more than 360 billion dollars in two-way trade.

With the unusually high tariffs, Trump sought to decrease the United States’ trade imbalance with China, which totaled 379 billion dollars in 2018. But he attempted to justify the aggressive tariff strategy by claiming that they were in response to Beijing allegedly stealing intellectual property and forcing US companies to transfer technology for access to the Asian country’s markets.

China, which rejected the allegations, later filed a complaint against the United States with the WTO.

China takes US to WTO amid escalating trade war

China says it has filed a complaint against the latest US with the World Trade Organization (WTO) over the tariffs that Washington has been imposing on Chinese imports.

The organization’s panel explained that it had looked only into the US measures and not China’s retaliatory tariffs.

“The panel is very much aware of the wider context in which the WTO system currently operates, which is one reflecting a range of unprecedented global trade tensions,” the report said.

The WTO further suggested that the United States bring its measures “into conformity with its obligations,” but also encouraged the two sides to work to resolve the overall dispute.

“Time is available for the parties to take stock as proceedings evolve and further consider opportunities for mutually agreed and satisfactory solutions,” it said.

The ruling drew the United States’ anger. US Trade Representative Robert Lighthizer said, “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.”

Trump has already threatened to pull his country out of the WTO, accusing it of treating his country unfairly. He has formerly called the organization a “catastrophe” and a “disaster” for the US and said Washington does not have to comply with its rulings.

Trump threatens to pull US out of WTO if conditions not met

US President Donald Trump has threatened to pull his country out of the World Trade Organization (WTO) if conditions are not overhauled.

The ruling will have little immediate effect on the US tariffs and is just the start of a legal process that could take years to play out, ultimately leading to the WTO approving retaliatory measures if the decision is upheld, which China has already taken on its own.

Nevertheless, Washington is likely to appeal.

The WTO was established in 1995 to promote free trade between countries. Its rules and regulations are formed on the basis of consensus among all its 164 members.

China’s Commerce Ministry, meanwhile, reacted by saying that Beijing supported the multilateral trade system and respected WTO rules and rulings, hoping that Washington would do the same.

Trump signed a trade agreement with China’s Vice Premier Liu He in January. The deal was a bid to end the trade war between the world’s two largest economies. It included pledges from China to import an additional 200 billion dollars’ worth of US products over two years. The US, in turn, pledged to slash in half its tariffs of 15 percent on about 120 billion dollars’ worth of Chinese consumer goods.

But tariffs on hundreds of billions of dollars in goods remain in place, on two-thirds of the over 500 billion dollars in imports from China.

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