Trade dispute: US challenges WTO decision on punitive tariffs against China


In September, the World Trade Organization (WTO) ruled that US punitive tariffs on Chinese goods totaling $ 200 billion violated the General Agreement on Tariffs and Trade (GATT). But the US government is dissatisfied with the result and opposes it. According to the WTO, this was announced by US officials at a meeting of the organization’s dispute resolution body.

The dispute resolution body had urged the Washington administration “to align its actions with its obligations.” The United States has not provided sufficient evidence or justification for its actions. Beijing had already complained to the WTO about the punitive tariffs imposed on Chinese goods by the US administration of President Donald Trump.

Tariffs were the prelude to an increasingly bitter trade conflict, in which the world’s two largest economies imposed massive punitive tariffs on each other. In mid-January, both sides finally signed a partial agreement. In it, Beijing has committed to importing more US goods and respecting intellectual property. In return, the US has given up on new punitive tariffs and lowered some of the existing tariffs.

China will have to wait for compensation

The US government had already harshly criticized the WTO’s decision on US tariffs. U.S. Trade Representative Robert Lighthizer said this shows that the World Trade Organization is wholly inadequate in stopping China’s harmful technological practices. Trump repeatedly accuses China of unfair trading practices and intellectual property theft.

At the same time, with the objection, the United States nullifies China’s ability to pursue dispute resolution before the WTO and seek financial compensation for tariffs deemed ineligible. Chinese WTO representatives expressed disappointment at the objection and accused Washington of taking advantage of the appellate body’s current paralysis. There are currently 16 appeals still to be processed.

The WTO, based in Geneva, is one of the most important international economic policy organizations, together with the International Monetary Fund (IMF) and the World Bank. Above all, it is intended to provide a forum for negotiations on dismantling tariffs and other trade barriers and to check whether international trade agreements are respected.

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