WTO panel finds in favor of US on China tariffs dispute

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The WTO has found that tariffs imposed by China on $3 billion of US imports are incompatible with global trade rules.

A dispute resolution panel at the World Trade Organization (WTO) has found in favor of the US in the latest round of its ongoing dispute with China, ruling that a series of tariffs imposed by Beijing violate international trade rules.

The decision relates to duties imposed by the Chinese government on up to $3 billion worth of US imports across 123 categories, including aluminum waste and scrap, pork, fruits, and nuts. These were enacted in retaliation for levies on steel and aluminum shipments to the US imposed by the administration of Donald Trump.

Although the WTO found the US' metal tariffs to be against the rules in December last year, the government of president Joe Biden has rejected that ruling and kept in place duties of 25 percent on steel and ten percent on aluminum, which the US has justified on national security grounds. 

Now, however, the WTO's dispute body has determined that the retaliatory measures from Beijing are also "inconsistent" with the country's obligations under the General Agreement on Tariffs and Trade.

The ruling was welcomed by Washington, with US Trade Representative spokesman Sam Michel saying the panel had "rightly rejected" China's arguments.

He added: "China’s decision to pursue this dispute highlights its hypocrisy by both suing the United States in the WTO and at the same time unilaterally retaliating with tariffs."

Meanwhile, China's commerce ministry said it will study the ruling to determine its next steps in accordance with WTO rules.

The ministry added that the problem stems from "the unilateralism and protectionism of the US,” and stated the countermeasures were to “safeguard [China's] legitimate rights and interests”.

Mr Michel also said that the case highlights the ineffectiveness of the WTO when it comes to addressing "on-market excess capacity from China and others", which he described as an existential threat to the US' steel and aluminum sectors.

He also reiterated criticism of the previous ruling on the US' steel and aluminum tariffs, saying the organization "does not have the authority to second-guess a WTO member’s response to threats to its security".