The US has described the World Trade Organization as “completely inadequate” after criticism of the Trump administration’s tariffs on China.
The WTO said on Tuesday that the US violated global trade rules on Chinese goods over $ 200 billion in the salvo of the inauguration of President Donald Trump’s trade war with Beijing two years ago.
The US said the tariffs were justified because China was stealing intellectual property and forcing American companies to transfer technology to access China’s markets.
But a three-member panel of the World Trade Organization said the duties broke trade rules because they applied only in China and were above the maximum rates previously agreed to by the US government. Washington then did not adequately explain why its measures were a reasonable exception, the panel concluded.
The decision prompted Trump, who has already kicked the US out of the UN’s cultural organization UNESCO and the World Health Organization, to say in Washington that he “has to do something about the World Trade Organization because he has given China Has turned away from murder “.
The US Trade Representative, Robert Lighthizer, said in a statement, “This panel report confirms what the Trump administration has been saying for four years: The World Trade Organization is grossly inadequate to curb China’s harmful technology practices.”
“The United States should be allowed to defend against unfair trade practices, and the Trump administration will not allow China to use the WTO to leverage American workers, businesses, farmers, and farmland.”
China’s Ministry of Commerce stated that Beijing supports the multilateral trade system and respects the WTO’s rules and regulations, and expects Washington to do the same.
The decision would not have much immediate effect on US tariffs and was only the beginning of a legal process that could take years to come into play, eventually retaliatory measures to go to the WTO are approved if it is upheld. China has already taken some counter measures.
The US was likely to appeal Tuesday’s decision. However, the case would be put into legal void, as Washington has already halted the appointment of judges to the WTO’s appellate body to prevent the summoning of the minimum number required to hear the cases.
The WTO panel knew it was going into hot water. It noted that it had focused only on US measures and not on China’s retaliation, which Washington has not challenged in the World Trade Organization.
The 66-page report states, “The WTO system is very well aware of the panel in the broader context currently underway, reflecting a range of unprecedented global trade tensions.”
The panel recommended the US bring measures “in line with its obligations”, but encouraged both sides to work to resolve the overall dispute.
“Time is available for the parties to take stock as the proceedings develop and further consider opportunities for mutually agreed and satisfactory solutions,” it said.
During a two-year trade war with Beijing, Trump threatened tariffs on almost all Chinese imports – more than $ 500bn – after the two countries signed a “Phase 1” trade deal in January. Additional customs duties are still valued at some $ 370bn of Chinese goods, and since July 2018 US Customs data show $ 62.16bn duties have been collected.
As he left the White House for a campaign rally in Pennsylvania on Tuesday, Trump said he needed to take a closer look at the ruling, but added: “I’m not a big fan of the World Trade Organization – that I’m I can tell you now. Maybe they did us a big favor. “
Margaret Sekuta, a former USTR official, said the decision could help propel Trump’s decision to leave the World Trade Organization or reduce US arguments at the 25-year-old trade body. .
The WTO says it is in a position to call the administration repeatedly. If they cannot rule on intellectual property rights, what is their position in the wider economy? “Said Cekuta, now a principal with the Capital Council lobbying firm.