The WTO authorizes China to set tariffs against the United States
The World Trade Organization (WTO) allowed China the possibility of setting tariffs against the United States, as part of an authorization to suspend benefits of 645 million dollars a year after winning a dispute resolution panel.
The case stems from the improper imposition of countervailing duties imposed on US imports on 10 Chinese products: pressure tubes; tubes; kitchen shelves; OCTG; thoron; seamless tubes; paper for graphic printing; aluminum extrusions; steel cylinders; and solar panels.
Thus, this procedure was given by virtue of article 22.6 of the Dispute Settlement Understanding (DSU) and was initiated due to the continuous refusal of the United States to comply with the recommendations and resolutions of the Dispute Settlement Body (DSB) in the matter United States-Countervailing Measures (China) (DS437).
First of all, on 15 August 2019, the DSB adopted the DS437 compliance panel report, as modified by the Appellate Body report.
In that report, the Appellate Body upheld the compliance panel’s findings that the United States had acted inconsistently with Articles 1.1(b) and 14(d) of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) in four countervailing duty investigations.
The Appellate Body also upheld the compliance panel’s findings that the United States had acted inconsistently with Article 2.1(c) of the SCM Agreement in the same four investigations and in seven other countervailing duty investigations.
Tariffs against the United States
The DSB ruled that the US measures at issue are inconsistent with the relevant provisions of the SCM Agreement and recommended that the United States bring its measures into conformity with its obligations under that Agreement.
Despite these findings, the United States refused to bring its measures into conformity with the DSB’s recommendations and rulings.
Since the United States has refused to bring its illegal measures into conformity with its WTO obligations, China requested authorization to suspend concessions or other obligations under the covered agreements.
For the reasons set out by China in its methodology paper, its written submission, its oral statements, its responses to questions posed by the Arbitrator, and its comments on the United States’ responses to questions posed by the Arbitrator, China maintains that the United States failed to demonstrate that China’s proposed level of suspension is not equivalent to the level of nullification and impairment suffered by China as a result of the United States’ failure to bring its measures into conformity with the DSB’s recommendations and rulings.