US violated trade rules with tariffs against China: WTO1 min read . Updated: 15 Sep 2020, 07:59 PM IST
A WTO panel of three trade experts said the US violated international rules when it imposed tariffs on Chinese goods in 2018
GENEVA : The World Trade Organization said that US tariffs on Chinese goods violate international rules, undermining President Donald Trump’s trade war against Beijing that’s seen Washington put tariffs on more than $550 billion of China’s exports.
On Tuesday a panel of three trade experts said the US violated international rules when it imposed tariffs on Chinese goods in 2018.
While the ruling bolsters Beijing’s claims that Trump’s trade war skirted WTO rules, Washington can effectively veto the decision by lodging an appeal at any point in the next 60 days. That’s because the Trump administration has already paralyzed the WTO’s appellate body, a tactic that has rendered toothless the world’s foremost arbiter of trade.
The dispute centers on the Trump administration’s use of a 1970s-era US trade law to unilaterally launch its commercial conflict against China in 2018.
China claimed the tariffs violated the WTO’s most-favored treatment provision because the measures failed to provide the same tariff treatment that the US provides to imports of all other WTO members. China also alleged the tariffs violated a key dispute settlement rule that requires countries to first seek recourse from the WTO dispute settlement body before imposing retaliatory tariffs against another country.
The US tariffs against China were authorized under Section 301 of the Trade Act of 1974, which empowers the president to levy tariffs and other import restrictions whenever a foreign country imposes unfair trade practices that affect US commerce. The Trump administration has claimed the US tariffs were necessary to confront China’s widespread violations of intellectual property rights and forced technology transfer policies on the part of China.
Though the use of Section 301 isn’t unprecedented, the provision largely fell out of favor in the 1990s after the US agreed to first follow the WTO’s dispute settlement process before it triggered any retaliatory trade actions according to Section 301.