WTO panel rules against most U.S. tariffs against China

Sep 16 , 2020. 5 hours ago – 04:55 KYODO NEWS

Photo taken Sept. 30, 2019, shows the headquarters of the World Trade Organization in Geneva. (Kyodo)

GENEVA – A dispute settlement panel of the World Trade Organization on Tuesday ruled against the majority of the tariffs imposed by the United States on Chinese goods amid the trade war between the world’s largest economies.

The WTO panel said the U.S. measures violate a central principle of international trade and Washington’s own terms of accession to the Geneva-based organization.

China welcomed the ruling, with a Commerce Ministry spokesperson calling it an “objective and fair” decision.

Stressing that China has always supported the multilateral trading system and WTO rulings, the spokesperson said that China hopes the U.S. side will fully honor the ruling of the WTO expert panel and respect the rules-based multilateral system.

In contrast, U.S. Trade Representative Robert Lighthizer criticized the panel’s conclusion, saying in a press release, “The WTO is completely inadequate to stop China’s harmful technology practices.”

Pointing out that the WTO’s latest report has confirmed allegations against Beijing by the administration of U.S. President Donald Trump, Lighthizer said, “The United States must be allowed to defend itself against unfair trade practices, and the Trump administration will not let China use the WTO to take advantage of American workers, businesses, farmers, and ranchers.”

The panel compiled the report after China filed a complaint with the WTO over import restrictions by the United States.

In July and August of 2018, the United States enacted 25 percent tariffs on roughly $50 billion worth of Chinese imports, followed in September of the same year by 10 percent tariffs on an additional $200 billion of such goods.

The September tariffs were then raised from 10 to 25 percent in May 2019.

The WTO panel said the tariffs violate the most-favored-nation principle, which prevents WTO members from discriminating against any other member by enforcing higher tariffs than those imposed on other countries.

Additionally, the panel ruled that the tariffs exceed the maximum rate agreed to by Washington during its accession process to the WTO.

The United States has argued that the tariffs were enacted to protect American “public morals” against what it calls China’s “state-sanctioned theft” of American technology and intellectual property.

But the panel rejected the claim, saying the United States has not provided any substantiated evidence of the necessity of such tariffs to protect American public morals.

While noting that ongoing trade negotiations between the United States and China are related to the WTO proceedings, the panel dismissed the U.S. argument that the “phase one deal” reached between the two countries in January constitutes a settlement of the dispute, which would have put it outside the panel’s mandate.

The United States has 60 days to appeal the ruling.

CR:KYODO NEWS