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Trade war: WTO rules against US tariffs on China

The World Trade Organization (WTO) ruled against the tariffs that started the trade war between the United States and China, that is, the import taxes that United States customs imposed on Chinese products with an annual value of about 234,000 million of dollars.

The tariffs were imposed in 2018 and were the first in the trade war between the two powers, which later led to further increases in tariffs and bilateral retaliation.

However, the resolution will not have an immediate effect, since the last instance of WTO litigation is not working, because the US government has opposed renewing the arbitrators that make up the Appellate Body.

In any case, the ruling somewhat detracts from the legitimacy of the tariffs imposed by President Donald Trump almost a month and a half before the US presidential elections, in which he seeks to be reelected, take place.

“The United States has not provided sufficient evidence or explanations to substantiate its claim that the measures are necessary to protect the ‘standards of right and wrong’ invoked by the United States and that are considered public morality in the United States,” he said. the WTO Panel in its ruling.

On August 18, 2017, the United States Trade Representation began a Section 301 investigation against China, the first use of that resource since 2010. It is the most significant trade case launched by the US government, given the magnitude of losses. trade arising from the theft of intellectual property rights in China.

A first report on the matter details four methods that the Chinese government uses to advance unfairly in its industrial policy objectives: forced transfer of intellectual property or technology; discriminatory license restrictions; acquisition of technology and assets coordinated or supported by the State; and use of cyber intrusions to gain unauthorized access to confidential corporate information.

Trade war

The Panel concluded the following:

The parties have not reached a mutually satisfactory solution within the meaning of Article 12.7 of the Dispute Settlement Understanding (DSU), nor have they otherwise waived their rights to initiate a dispute settlement proceeding in the WTO on the measures at issue in the present dispute.

All of the measures challenged by China are within the Panel’s terms of reference, and it is appropriate for the Panel to make findings and recommendations with respect to the first measure identified in China’s request for the establishment of a panel (additional duties of 25% on the products of list 1) and the second measure amended on May 9, 2019 (additional duties of 25% on the products of list 2).

The challenged measures are prima facie inconsistent with Articles I.1, II.1 a) and II.1 b) of the GATT 1994.

Leading exporters and importers in world merchandise trade, 2019

(Billion US $ and%)

The United States has failed to meet its burden to demonstrate that the measures at issue are provisionally justified under Article XX (a) of the GATT 1994.

 

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