GENEVA, Switzerland – The World Trade Organization (WTO) has found that China’s imposition of tariffs on United States imports, a retaliatory move against U.S. tariffs on steel and aluminum, breached global trading regulations.
A WTO dispute resolution panel concluded that the Chinese tariffs contravened several provisions of the General Agreement on Tariffs and Trade (GATT). These findings are the latest development in a series of trade disputes between the two largest global economies. The dispute centers on China’s April 2018 decision to levy tariffs on 128 U.S. products, amounting to $3 billion in trade, which was a response to the U.S. administration’s imposition of significant tariffs on steel and aluminum imports from China and other countries.
The U.S. tariffs were introduced under claims of national security threats due to large-scale imports, a marked shift from the U.S.’s historical advocacy for free trade. While the current U.S. administration under President Joe Biden has moderated the tone of trade discussions, it has maintained these tariffs. In a separate but related development, WTO panels have also ruled that the U.S. steel and aluminum tariffs violated international trade norms. The U.S. has appealed these rulings, which indicated that the security exceptions cited by the U.S. did not meet the criteria outlined in GATT, such as conditions of war or serious international tensions.
The recent WTO panel ruling, however, did not reevaluate the U.S.’s invocation of national security justifications for its tariffs. Instead, the panel noted that since the U.S. tariffs were not safeguard measures—meant to protect domestic industries—the provisions allowing for retaliation against such measures did not apply, contradicting China’s stance.
The WTO panel has advised China to align its measures with its obligations under GATT. Responding to the ruling, an unnamed official from China’s Ministry of Commerce, quoted by state media Xinhua, stated that the ministry is reviewing the panel’s report and will take actions consistent with WTO rules. The official also called for the U.S. to rescind the steel and aluminum measures that “violate WTO rules.”
Sam Michel, a spokesman for the U.S. trade representative, interpreted the decision as a recognition of China’s “illegal retaliation with sham ‘safeguard’ tariffs” and criticized China for the inconsistency of suing the U.S. at the WTO while imposing unilateral tariffs. Following this decision, China has the option to appeal the panel’s ruling. However, the WTO’s appellate body has been incapacitated since late 2019 due to the U.S.’s blockage of new judge appointments, complicating the process for resolving such disputes further.
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