China violated its fundamental trade commitments when it imposed tariffs on $2.4 billion worth of US products in retaliation for former President Donald Trump’s steel and aluminum duties, the World Trade Organization said.
(Bloomberg) — China violated its fundamental trade commitments when it imposed tariffs on $2.4 billion worth of US products in retaliation for former President Donald Trump’s steel and aluminum duties, the World Trade Organization said.
In a ruling published Wednesday, a panel of three WTO experts agreed with Washington’s claims that China’s tariffs denied the treatment as a so-called most favored nation, and that Beijing violated other trade concessions it made when it joined the WTO.
The organization’s most favored nation principle is a commitment by its 164 members to treat other signatories in an indiscriminate manner or else provide compensation in the form of trade concessions.
The Biden administration was “pleased” with the ruling and said China’s actions highlight Beijing’s “hypocrisy by both suing the United States in the WTO and at the same time unilaterally retaliating with tariffs,” US Trade Representative spokesperson Sam Michel said in a statement.
China’s Ministry of Commerce defended the tariffs, saying the move is fair to safeguard its legal interests. In a statement issued after the ruling, it urged the US to remove the duties.
Either China or the US may appeal the ruling within the next 60 days. If Beijing appeals, it will act as a veto because the WTO appellate body has been non-functional since 2019. A spokesman from the Chinese mission to the WTO did not respond to Bloomberg’s request for comment.
The dispute dates back to the early days of Trump’s trade war when his administration imposed 25% tariffs on global steel imports and 10% tariffs on aluminum imports.
The US metal tariffs, which were aimed at curbing an influx of cheap Chinese steel and aluminum, provoked a response from Beijing, which filed a WTO complaint and imposed tariffs on a range of imported US goods including aluminum waste and scrap, pork, fruits and nuts.
The US responded with a counter dispute alleging the Chinese duties were illegal and separately claimed that the metal tariffs were necessary to protect US national security.
In December 2022, a separate WTO panel said the US metal duties were not justified under the WTO’s national security exemption in a ruling that the Biden administration strongly rejected. Trump’s tariffs on Chinese steel and aluminum still remain in effect.
–With assistance from Li Liu.
(Updates with comment from China’s Ministry of Commerce in fifth paragraph.)
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