After criticizing the Trump administration’s tariffs on China, the United States described the World Trade Organization as “completely insufficient.”
The WTO said on Tuesday that the United States violated global trade rules by imposing tariffs on more than $200 billion of Chinese goods during the opening ceremony of the trade war between Donald Trump and Beijing two years ago.
The United States said that the tariffs are justified because China is stealing intellectual property rights and forcing American companies to transfer technology to enter the Chinese market.
But the WTO’s three-member panel said these tariffs violated trade rules because they only apply to China and are higher than the highest tax rate previously agreed by the US government. The panel concluded that Washington did not fully explain why its measures were a reasonable exception at the time.
This decision prompted Trump, who has driven the United States out of the United Nations Cultural Organization, UNESCO and the World Health Organization, to say in Washington that he must “do something with the WTO because they freed China from murder.”
U.S. Trade Representative Robert Lighthizer said in a statement: “The panel report confirms that the Trump administration has been saying for four years that the WTO is completely inadequate to stop China’s harmful technological practices.
“The United States must be allowed to defend unfair trade practices. The Trump administration will not allow China to use the WTO to take advantage of the interests of American workers, businesses, farmers and ranchers.”
The Ministry of Commerce of China stated that Beijing supports the multilateral trading system and respects WTO rules and rulings, and hopes that Washington will do the same.
The decision will not have much direct impact on US tariffs. It is just the beginning of a legal process, which may take several years to complete, which will eventually lead to the WTO’s approval of retaliatory measures, if persisted. China has already taken some countermeasures.
The United States may appeal the ruling on Tuesday. However, this will make the case a legal blank because Washington has blocked the appointment of judges to the WTO’s Appellate Body, thereby preventing the minimum number of people required to call a hearing.
The WTO panel of experts realizes that it is entering the hot water field. It pointed out that it only studied US measures, not China’s retaliatory measures, and Washington has not questioned this in the WTO.
The 66-page report concluded: “The expert group is very aware of the current scope of the WTO system, which reflects a series of unprecedented global trade tensions.”
The group recommends that the United States take measures to “conform to its obligations,” but it also encourages both parties to work together to resolve the overall dispute.
It said: “As the litigation process develops, all parties have time to evaluate and further consider the opportunity to reach a mutually agreed and satisfactory solution.”
In the two-year trade war with Beijing, Trump threatened to impose tariffs on almost all Chinese imports, totaling more than 500 billion U.S. dollars, and the two countries signed a “phase one” trade agreement in January. U.S. customs data shows that since July 2018, Chinese goods worth about 370 billion US dollars still need to be levied on tariffs, and tariffs of 62.16 billion US dollars have been collected.
When Trump left the White House for a campaign rally in Pennsylvania on Tuesday, he said he needed to study the ruling carefully, but added: “I am not a big supporter of the WTO-I can tell you now. Maybe they helped us a lot.”
Margaret Cekuta, a former official of the Office of the United States Trade Representative, said that this decision may help push Trump’s decision to withdraw from the World Trade Organization or support the reform of the 25-year-old trade organization in the United States. The argument. .
“This allows government ammunition to say that the WTO is obsolete. If they can’t rule on intellectual property rights, what is their position in the economy as a whole?” said Sekuta, who is now the head of a congressional consultant lobbying company.