Trade

China Seeks WTO Approval For Retaliatory Tariffs

JM Ashby
Written by JM Ashby

This is a very familiar story in many ways, but the shoe is on the other foot in this case.

The World Trade Organization's (WTO) Dispute Settlement Body recently ruled that China may pursue retaliatory sanctions against the United States for failing to roll back countervailing duties on certain exports from China such as solar panels and wind towers, among other things.

China is now asking the WTO for the green light to impose retaliatory tariffs on up to $2.4 billion in American goods and we, the United States, are dialing the hypocrisy up to eleven.

WTO appeals judges said in July that the United States did not fully comply with a WTO ruling and could face Chinese sanctions if it does not remove certain tariffs that break the watchdog’s rules.

The WTO’s Dispute Settlement Body effectively gave Beijing a green light to seek compensatory sanctions in mid-August. The United States said at the time that it did not view the WTO findings as valid and that the judges had applied “the wrong legal interpretation in this dispute”.

China continued to be the “serial offender” of the WTO’s subsidies agreement, the U.S. delegation said. Contacted by Reuters on Monday, the U.S. mission in Geneva had no immediate comment.

The Trump regime was more than happy to favorable cite the WTO's recent ruling in favor of retaliatory tariffs on European goods in response to the European Union's subsidies for Airbus, but as you can see they do not respect the WTO's decision regarding China.

Even if the Trump regime was inclined to respect the WTO's ruling (which they aren't) rolling back duties on these goods is not politically viable right now because, like everything else, it's caught up in Trump's trade war. Right or wrong, eliminating duties right now would look like a sign of weakness.

Like our dispute with the European Union over their subsidies for Airbus, the initial investigations that led to countervailing duties on Chinese goods date all the way back to the tale end of the Bush administration in 2007.

Trade wars are not "good and easy to win" and even these minor disputes do not appear to materially benefit anyone but those who happen to be shareholders on the day that sanctions are announced. Trump's tariffs on foreign metal were also good for shareholders for a time, but his they were ultimately a poison pill.

I'll be keeping an eye on this story because I doubt it will end here.

  • muselet

    Donald Trump’s rage-tweets about the WTO and China will be something to behold.

    –alopecia