China request WTO for sanctions against US of US$2.4 billion
China is demanding US$ 2.4 billion in retaliatory sanctions against the US for failing to comply with a decision by the World Trade Organization (WTO) in a lawsuit that reflects White House concerns about the global trading agency.
The Dispute Settlement Body (DSB) of the WTO will review the case dating back to the October 28 Obama era, a document published on Monday (Oct 21) showed.
WTO appeals judges said the United States did not fully comply with a tariff ruling on Chinese solar panels, wind towers, and steel cylinders in July.
He said that if Washington didn’t remove them, Beijing might enforce retaliatory sanctions.
Washington has challenged the validity of the WTO ruling and could send the matter to arbitration to dispute the US$ 2.4 billion in retaliatory sanctions.
The dispute comes as the Trump administration is fighting Beijing on a broader trade war, pushing the WTO to revamp rules that allow China to call itself a “developing country.”
US officials say that, while subsidising manufactured goods and selling them on world markets, China profits from preferential consideration at the WTO.
Indeed, the WTO dispute body gave Beijing the green light in mid-August to seek compensatory sanctions.
At the time, the United States said it did not see the findings of the WTO as valid and that the judges had applied “the wrong legal interpretation in this dispute.”
The US delegation then said that China remained the “serial offender” of the WTO subsidy agreement. There was no further comment on Monday by US officials in Washington and Geneva.
At an event hosted by a Washington think tank, Alan Wolff, deputy director-general of the WTO, the organisation’s highest-ranking American, declined to comment on the particular case.
But he said he was persuaded of the WTO’s relevance. He said the fact that representatives agreed to lodge cases with the WTO reflected their confidence that it would finally be possible to resolve a prolonged impasse over the WTO dispute settlement procedure.
“The WTO can’t prevent a trade war, but it can be part of the solution,” he said.
“There may be difficult times ahead, but eventually, the trading system will be enduring and be strengthened.” In 2012, China went to the WTO to contest US anti-subsidy tariffs, defined as countervailing duties, on Chinese goods that Beijing estimated at US$ 7.3 billion at the time.
The duties were imposed as a result of 17 investigations started between 2007 and 2012 by the U.S. Department of Commerce.
U.S. Trade Representative (USTR) Robert Lighthizer’s office said the WTO decision recognised that the U.S. had shown that China was using state-owned businesses to subsidise or manipulate its market.
The decision also claimed that the United States had to recognise Chinese prices to calculate subsidies, while USTR found such rates “distorted.”
Over the past 15 months, the United States and China have imposed a series of tit-for-tat tariffs that have roiled financial markets and dragged global economic growth sharply.
On Monday, U.S. President Donald Trump said work on a trade agreement between the U.S. and China was going well.
He said on Friday that a trade deal would be concluded between the two largest economies in the world by the time of the Asia-Pacific Economic Cooperation meetings in Chile on Nov. 16 and 17.