China appeals WTO ruling over its retaliatory tariffs on US imports

A sign of the World Trade Organization (WTO) is seen at the trade intergovernmental organization headquarters in Geneva  (Photo by Fabrice COFFRINI / AFP)

GENEVA, Sept 19, 2023 (AFP) – China has appealed a World Trade Organization ruling faulting it over tariffs it has imposed on billions worth of US imports in retaliation for Washington’s steel and aluminium duties.

The chair of WTO’s Dispute Settlement Body informed diplomats Tuesday that China had notified its decision to appeal a ruling last month by a panel of experts finding its extra tariffs violated international trade rules, a Geneva-based trade official said.

In its report circulated to member states on August 16, the WTO panel set up to help resolve one of numerous disputes within the tit-for-tat trade war between the world’s two biggest economies found that China’s “additional duties measure is inconsistent” with various articles of the General Agreement on Tariffs and Trade (GATT).

The DSB had been planning to discuss the report Tuesday, but after the appeal was announced, the item was removed from the agenda, the trade official said.

The case revolves around China’s decision in April 2018 to impose tariffs on 128 US imports worth $3 billion, including fruits and pork.

That move came shortly after the administration of former US President Donald Trump announced steep tariffs on steel and aluminium imports from China and a number of other countries.

Marking a departure from a decades-long US-led drive for free trade, Trump justified the steep tariffs with claims that massive flows of imports to the United States threatened national security.

The administration of his successor, President Joe Biden, has taken a less combative tone but has stuck with the tariffs.

Separate panels set up by the WTO’s Dispute Settlement Body to settle complaints filed over the US steel and aluminium tariffs ruled late last year they too violated international trade rules.

Washington has appealed those rulings, which also determined that the inconsistencies found were not justified by the security exceptions provided for in the GATT, as they were not applied in a time of war or during a case of serious international tension.

Last month’s panel ruling did not delve back into whether Washington was justified in claiming national security exemptions.

But it acknowledged the US tariffs had been imposed evoking such objectives, and not as so-called safeguard measures imposed to protect domestic industry.

It therefore found that an agreement allowing for retaliation against unjust safeguard measures did not apply in this case, as China maintained.

It remains unclear what will happen to the case now that China has appealed.

The WTO’s appeals tribunal — also known as the supreme court of world trade — has been frozen since late 2019, after the United States under Trump blocked the appointment of new judges and demanded a dramatic overhaul.

By filing appeals into a void, countries can in effect block others’ ability to move forward and request financial compensation for activities deemed illegal by the DSB.