WTO rules against US tariffs on Chinese goods

The World Made Organization (NTO) on Thesday ruled against US tariffs on Chinese goods, say-ing the American levies violated international trading rules, a find-ing that undermined the Trump administration's justification for the tariffs. In the released report, the WTO's three-person panel of experts determined that the US did not have a satisfactory justification for placing tariffs on goods from China in 2018. The panel notes that it had reached the preliminary conclu-sion that the United States had not met its burden of demonstrating that its measures were provision-ally justified:' read the report In particular, the United States had not met its burden of demon-strating how its restrictions con-tributed to protecting its public morals and did not extend beyond what was necessary" it added. A spokesperson for China Minis-try of Commerce told reporters dur-ing a news conference that China 'appreciates the objective and fair ruling made by the expert panel':

“The multilateral trading system with the WTO at its core is the cornerstone of international trade. China has always firmly supported and maintained this cornerstone and respected WTO rules and rulings,” the spokesperson said.

“China also hopes that the United States will fully respect the rulings of the expert panel and the rules-based multilateral trading system and take practical actions to meet China and other WTO members to jointly maintain the multilateral trading system and promote the stable and healthy development of the world economy,” the spokesperson added.

The Trump administration has asserted that the tariffs were justified to protect American interests from what it called Beijing’s unfair trade practices. US Trade Representative Robert Lighthizer reiterated those claims after the ruling.

Jock O’Connell, a Northern

California-based international trade economist, said that the ruling would have no practical effects on the trade relationship between the two countries in the short term.

“I don’t really see the decision influencing US tariffs policy in the least bit. It will only reinforce the decision of the White House with respect to China trade. It’s almost a decision that is, for all practical purposes, irrelevant to US trade policymaking,” he said.

“The Trump administration is not going to take this decision very seriously. They have already made it clear that they want as little as possible to do with the WTO, and this decision by the WTO will only reinforce the Trump administration’s animosity toward the WTO and causes it to move even further away from honoring any decisions that are made by the WTO,” he added.

James Bacchus, a professor of global affairs at the University of Central Florida, who twice served as chief judge of the WTO Appellate Body, told the South China Morning Post that the ruling by the panel is correct.

“Unfortunately, in the absence of the Appellate Body, the United States can simply appeal this ruling into the void, and the members of the WTO will be unable to adopt the panel report,” he said.

“However, China already has retaliated against this US measure with trade sanctions on other US products prior to this ruling, so denial of the right to an appeal in this instance may make no practical difference,” he added.

When moving forward with the tariffs, Washington invoked Section 301 of the US Trade Act of 1974, which authorizes the president to impose trade restrictions and tariffs on foreign nations deemed to unfairly hinder US commerce.

The administration slapped tariffs of 10 percent on $200 billion worth of Chinese products in September 2018, which were increased to 25 percent eight months later. By late 2019, the US had threatened tariffs on about $550 billion worth of Chinese imports.

In response, China lodged a lawsuit with the WTO and claimed that the US violated articles in the General Agreement on Tariffs and Trade 1994, a legal agreement between countries aimed at reducing barriers to trade.

In a note in the report, the panel said it is “very much aware of the wider context in which the WTO system currently operates, which is one reflecting a range of unprecedented global trade tensions”. The panel encourages both sides to pursue further efforts to resolve the dispute.

The US has the option to appeal the WTO decision over the next 60 days.