WTO: "China's Retaliatory Tariffs on U.S. Imports Are Unfair"

Last Year, the U.S. Ruled "Steel Tariffs Unfair"

The World Trade Organization (WTO) ruled on the 16th (local time) that China's retaliatory tariffs on U.S. imports in response to U.S. steel tariffs are unjustified.

The WTO issued a statement on the day, stating that the WTO panel found China's additional tariff measures to be inconsistent with international trade rules.

Earlier, the Donald Trump administration imposed tariffs of 25% and 10% on Chinese steel and aluminum products respectively in 2018, citing national security threats. In response, the Chinese government retaliated by imposing additional tariffs on 128 U.S. imports, including fruit and pork. Both sides filed complaints against each other at the WTO.

The WTO judged that the U.S. tariffs on China violated trade regulations, reasoning that the justification of national security threats for imposing tariffs was not legitimate.

Regarding China's tariffs on U.S. goods, the WTO examined whether China's claim of a "legitimate response to unfair safeguards" complied with international regulations. Safeguards refer to temporary measures such as tariff increases or import quota restrictions when a sudden surge in imports threatens domestic industries. However, the WTO found that the U.S. tariffs were not aimed at protecting domestic industries but were based on security threats. Regardless of the legitimacy of the U.S. claim of "national security threats," the WTO concluded that the U.S. measures do not qualify as safeguards, and therefore there is no international trade regulation supporting China's retaliation.

Ultimately, neither side was favored in the U.S.-China trade dispute.

Both parties can appeal to the WTO. However, given the weakened dispute resolution function of the WTO, substantial results are unlikely. Since the end of 2019, the U.S. has not cooperated in appointing members to the appellate body, citing structural concerns with the WTO's appellate process. As a result, the appellate body within the WTO has effectively not been formed.