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In 2018 and 2019, the US and China exchanged new punitive tariffs on imports. The trade war affected the world economy. Now the WTO has ruled: The US tariffs were illegal.
The fiery trade dispute has been weighing down the US-China relationship since 2018. But the punitive tariffs that the US government under President Donald Trump imposed on China’s products in several steps are not legitimate from the Organization’s perspective. World Trade (WTO).
The WTO dispute resolution body concluded that the tariffs imposed by the United States violated the General Agreement on Tariffs and Trade (GATT). On the one hand, they were decided by the Trump administration to a much greater extent than the United States originally promised, the WTO justified its decision. On the other hand, the US had not given sufficient reasons as to the extent to which the tariffs were necessary to protect its own market from the “unfair competition” of which Trump had repeatedly accused China.
The fees were followed by fees and even more fees
In early July 2018, the United States imposed 25 percent tariffs on $ 34 billion worth of Chinese goods. And there were more surcharges on imports from the People’s Republic: at the end of August of the same year the following tariffs came into force. And then, less than a month later, Trump ordered a decree that ten percent of punitive tariffs should be applied to other $ 200 billion worth of Chinese goods. For its part, China responded with punitive tariffs, including on “made in USA” wine and sports equipment.
But why the mutual exchange of blows through ever new tariffs on more and more goods? The US government justified its actions on China’s “unfair practices” and accused the People’s Republic of theft of intellectual property and copyright infringement to gain an illegitimate role in the world market.
WTO calls for a solution to long-standing conflict
The WTO body had not addressed China’s tariffs because there had been no complaint from the United States, a representative of the organization said. The WTO recommended that the United States “harmonize the measures with its commitments.” China and the United States must strive to resolve their dispute in the face of “global trade tensions” that their trade conflict has caused.
A first step towards resolving the conflict seemed to have been taken in mid-January 2019: the US and China signed a partial agreement that is supposed to guarantee increased imports of US products into the Chinese market and, in exchange, stop importing. aside some punitive tariffs.
“Extensive evidence” of “unfair business practices”
But in an initial reaction to the WTO ruling, US Trade Representative Robert Lighthizer renewed the old accusations: “The United States must be allowed to defend itself against unfair trade practices, and the Trump administration will not allow China use the WTO to do it. ” to take advantage of American workers, businesses and farmers. “The United States has provided” extensive evidence “of China’s copyright violations, Lighthizer added, but the WTO is” completely inept in stopping China’s harmful technology practices. “
China’s Ministry of Economic Affairs, however, spoke of an “objective and fair” verdict that the US government should abide by.
The United States can challenge the committee’s decision, only then likely to let the process play out anywhere. Because then the Appellate Body of the WTO would be responsible. However, the United States government blocked the appointment of new judges to this body after the term of several judges expired last year. This means that the instance cannot currently act.
