The World Trade Organization ruled Tuesday that some U.S. tariffs against China broke international trading rules, a conclusion that exacerbates U.S.-WTO tensions and drew immediate backlash from Washington.
A WTO panel said that “China has demonstrated that the additional duties apply only to products from China and thus fail to accord to products originating in China an advantage granted to the like product originating in all other WTO Members.”
The Chinese Ministry of Commerce said the ruling was “fair and objective,” and hoped the U.S. would comply.
U.S. Trade Representative Robert Lighthizer criticized the ruling, saying the WTO 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.”
He also said its decision shows that the WTO provides no remedy for such misconduct, adding that the ruling would not have any effect on the U.S. China Phase I trade deal that was reached earlier this year.
The Trump administration has accused China of intellectual property theft and forced technology transfers and imposed tariffs on more than $200 billion in Chinese goods in 2018. China subsequently applied retaliatory tariffs on U.S. goods.
Gary Hufbauer, an economist with the Washington-based Peterson Institute for International Economics, told VOA that the ruling means both sides have violated global trading rules.
“As widely expected, the panel ruled that US Section 301 tariffs violate several WTO articles. By implication, the Chinese retaliatory tariffs violate the same articles,” he said.
Several members of Congress criticized the WTO for being influenced by China.
Senator Rick Scott, a Florida Republican, told VOA that China has never complied with WTO rules.
“It’s like a lot of organizations that China has been able to have influence on, because they never comply with anything they agree to…so we have keep doing what we do and hold them accountable,” he said.
Earlier in the day, he criticized WTO’s decision on Twitter, saying the ruling is “another evidence of a world organization cowering to the Chinese Communist Party.”
The @wto’s decision to side with Communist China & ignore clear evidence of their unfair trade practices is another example of a “world” organization cowering to the Chinese Communist Party.— Rick Scott (@SenRickScott) September 15, 2020
I applaud the Administration for continuing to fight for American workers & businesses. https://t.co/RKJ5Xd7taY
Senator Josh Hawley, a Republican from Missouri, said on Twitter that the decision shows that the WTO is “outdated, sclerotic, and generally bad for America.” He added the U.S. “should withdraw and lead the effort to abolish it. “
More evidence that the WTO is outdated, sclerotic, and generally bad for America. USA should withdraw and lead the effort to abolish it https://t.co/GvOL0pWRVm— Josh Hawley (@HawleyMO) September 15, 2020
Senator Mike Rounds, a South Dakota Republican, told VOA that the report is “concerning,” and the U.S. needs to “look into it.”
The WTO panel recommended the United States bring its measures “into conformity with its obligations”, but also encouraged the two sides to work to resolve the overall dispute.
However, Hufbauer said neither the U.S. nor China is likely to remove its tariffs as a consequence of the ruling.
“Both the U.S. and China are ignoring rules they agreed in the WTO. However, since the Appellate Body is now dysfunctional, the WTO is no longer able to impose penalties for breaking the rules,” he said. “This is a further blow to the WTO as an institution governing international trade.”
The WTO’s policing ability rests on its seven-judge Appellate Body, which reviews arbitration rulings. However, Washington has refused to replace judges whose terms expired, leaving the body without enough members to perform its functions.
Yi-Hua Lee contributed to this report.