China tariffs by US broke global trade rules: WTO panel

September 16, 2020 - Switzerland

A World Trade Organisation panel has ruled that the US tariffs on $200 billion worth Chinese goods are illegal. The three-person panel said the US duties broke global trade rules as those applied only to China and were above the maximum rates agreed to by the United States. The ruling may allow China to impose retaliatory tariffs on US goods worth billions.

But the decision is unlikely to have much impact now as the United States can make an appeal and WTO's appeals court is no longer functioning, primarily because of US refusal to add new members to it. The terms of two of its last three judges have expired with no replacements.

This is for the first time that WTO has ruled against a series of high-profile tariffs that President Donald Trump's government has imposed on a number of countries. Trump has repeatedly claimed that WTO treats the United States unfairly.

“This panel report confirms what the Trump administration has been saying for four years: The WTO is completely inadequate to stop China's harmful technology practices,” US trade representative Robert Lighthizer said in a statement.

He said the United States had presented ‘extensive evidence’ of China's intellectual property theft and WTO has offered no fixes for it.

“The United States must be allowed to defend itself against unfair trade practices, and the Trump administration will not let China use the WTO to take advantage of American workers, businesses, farmers and ranchers,” he added.

The Chinese ministry of commerce termed the ruling ‘objective and fair’ and urged the United States to respect it.