United States violated trade rules with tariffs against China: WTO

Marco Green
September 15, 2020

On Tuesday a panel of three trade experts said the U.S. violated global rules when it imposed tariffs on Chinese goods in 2018.

The Chinese ministry of commerce said the ruling was "objective and fair" and called on the U.S.to respect it.

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

Trump has repeatedly criticized the WTO, which oversees worldwide disputes on trade, for allegedly treating the US unfairly. However, it did not attempt to resolve the "dispute" through the WTO before kicking off what has become a grueling two-year trade war.

Beijing and Washington reached a partial truce earlier this year with the signing of their "phase one" trade deal. He said the US had presented "extensive evidence" of China's intellectual property theft and the WTO has offered no fixes for it.

"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 USA trade representative Robert Lighthizer in a statement.

President Donald Trump justified the China tariffs by citing a 1974 law allowing the president to impose tariffs and other restrictions on imports in retaliation for unfair trade practices and other tactics that disadvantage the United States commercially, insisting the levies were necessary to counter China's allegedly rampant violation of intellectual property rights, particularly in the technology sector.

China claimed the tariffs violated the WTO's most-favoured treatment provision because the measures failed to provide the same treatment to all WTO members.

The decision marks the first time that the Geneva-based trade body has ruled against a series of high-profile tariffs that President Donald Trump's government has imposed on a number of countries - allies and rivals alike. Trade Representative Robert Lighthizer insisted the United States 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 U.S. and China.

In its decision, the WTO ruled against the Trump administration's argument that China has engaged in practices harmful to US interests, on issues including intellectual property theft, technology transfer and innovation.

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.

While the European Union has so far been spared U.S. levies based on the controversial Section 301, the 27-nation bloc may breathe a sigh of relief over Tuesday's WTO verdict.

Other reports by Click Lancashire

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