WTO rules China allowed to put duties on $645m of US imports

WTO rules China allowed to put duties on $645m of US imports
It comes after a WTO arbitrator permitted China to slap duties on up to $3.6 billion worth of US imports in a separate case in November 2019.
3 min read
The WTO's decision is final [Pavlo Gonchar/SOPA Images/LightRocket/Getty]

The World Trade Organization (WTO) on Wednesday handed a fresh victory to China, permitting it to slap duties on $645 million worth of US imports per year, in a long-running anti-dumping dispute with Washington.

The United States, which is unable to appeal against the decision, branded it "deeply disappointing" and said it reinforced the need to reform the WTO's rules, saying they were being used to "shield" China.

"In light of the parties' arguments and evidence in these proceedings, we have determined that the appropriate level... is $645.12 million per annum," a WTO arbitrator ruled.

The WTO green light does not mean China will automatically impose the tariffs, in whole or in part, on US imports.

The figure was revealed in an 87-page decision by a WTO arbitrator on the level of countermeasures Beijing could request in its dispute with Washington regarding US countervailing duties (CVD) on certain Chinese products.

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The dispute stretches all the way back to 2012, when the WTO set up a panel of experts to try to settle a complaint filed by China over what it said were unfair duties imposed by the United States.

Washington had justified the additional tariffs on products ranging from paper to tyres and solar panels, arguing they were being dumped on the market to help Chinese companies grab business.

The WTO Dispute Settlement Body ruled in China's favour and the ruling was upheld by its appeals judges in 2014, paving the way for China to retaliate.

Beijing initially asked to be permitted to slap tariffs on $2.4-billion-worth of US products each year, but then scaled back its demand to $788.75 million.

The United States had argued that the appropriate level should not exceed $106 million per year.

The use of anti-dumping duties are permitted under international trade rules as long as they adhere to strict conditions, and disputes over their use are often brought before the WTO's Dispute Settlement Body.

Wednesday's decision marks the second time the WTO has allowed China to retaliate for US anti-dumping duties deemed to be in violation of international trade rules.

In November 2019, a WTO arbitrator permitted China to slap duties on up to $3.6 billion worth of US imports, in a separate case.

So far, China has not notified the WTO that it has implemented the approved retaliatory tariffs from that case.

Washington fury

Adam Hodge, a spokesman for the US Trade Representative Katherine Tai, lashed out at Wednesday's ruling.

"The deeply disappointing decision today by the WTO arbitrator reflects erroneous Appellate Body interpretations that damage the ability of WTO members to defend our workers and businesses from China's trade-distorting subsidies," he said.

"Today's decision reinforces the need to reform WTO rules and dispute settlement, which have been used to shield China's non-market economic practices and undermine fair, market-oriented competition."

He said US President Joe Biden's administration would continue to use all available means to stand up for the interests of US workers, businesses, farmers and producers, and strengthen the country's middle class.

Washington has long complained about the WTO dispute settlement system, and especially its appeals court, claiming unfair treatment.

Biden's predecessor Donald Trump brought the system to a grinding halt in December 2019 by blocking the appointment of new judges to the Appellate Body.