WTO rules in China's favour over sanctions spat

Legislation | 18 July 2019

There was victory for China this week in another long-running dispute with the US.


The World Trade Organization (WTO) has ruled in China's favour in a dispute with the US over sanctions that began in 2012.

Its appeals judges said this week that the US failed to fully comply with WTO regulations and could face Chinese sanctions if it does not remove certain tariffs as soon as possible that breach them.

The case related to US anti-subsidy tariffs on Chinese exports including solar panels, wind towers and steel cylinders, with America repeatedly complaining that it could not compete with China because its government was putting it at an unfair advantage using handouts.

As a result, Washington applied tariffs to these exports, but Beijing went to the WTO Appellate Body to challenge this - and has now won.

The ruling also said the US must accept Chinese prices for measuring subsidies, even though the US Trade Representative (USTR) has complained they are "distorted".

It is sure to come as a blow to US president Donald Trump's attempts to stamp out state-led pricing, as well as further sour his already-unfavourable attitude towards the WTO judiciary process and Appellate Body.

Indeed, the USTR has said this outcome illustrates its concerns over the governing body overstepping its authority.

A statement from China's commerce ministry has said the decision is proof that America "repeatedly abused trade remedy measures, which seriously damaged the fairness and impartiality of the international trade environment".

The ruling may open the door for China to put retaliatory sanctions in place if the US does not heed it and accept Chinese pricing.

China and the US have been locked in a bitter dispute over trade issues for around a year now, with this week's ruling unlikely to help matters.

Mr Trump recently said he is not in a hurry to resolve the economic war, insisting his tariffs have already had an impact on the Chinese economy and are therefore working as planned.