The World Trade Organization has ruled that the United States government violated international trade rules by imposing tariffs on China in 2018, during a trade war between the two countries, The New York Times reported on Wednesday. The WTO was hearing a complaint by China that the tariffs violated several global rules, including a provision that requires all WTO members to offer equal tariff rates among the body’s trading partners.
US President Donald Trump had violated this provision, imposing tariffs worth more than $360 billion (Rs 26 lakh crore) worth of Chinese products. Trump used a provision in American law called Section 301, which allows the president to restrict foreign commerce that “unfairly burdens” the United States.
United States Trade Representative Robert E Lighthizer attacked the World Trade Organization following its ruling. “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,” Lighthizer said. “Although the panel did not dispute the extensive evidence submitted by the United States of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct.”
The United States government has 60 days to respond to the WTO’s decision. But the ruling may remain only on paper, as over the past two years, Washington has blocked the WTO from appointing new members to a panel that hears trade disputes. This means there can be no official resolution of many international trade disputes.
Trump has in the past described the WTO as “horrible”, and threatened to pull the US out of the organisation.
If the panel had enough members to function and they upheld the ruling, the WTO could authorise China to retaliate against US tariffs. If the United States chooses not to appeal but also ignores the ruling, China can ask the WTO to allow it to impose tariffs on America.
China’s Commerce Ministry said Beijing supports the multilateral trading system and respects WTO rulings, Reuters reported.