U.S.-China Talks Continue As Both Countries Seek To Impose New Penalties

Early last week, the Chinese government asked the World Trade Organization (WTO) to approve $2.4 billion in retaliatory penalties against the United States for failing to comply with a prior WTO ruling. As Reuters explained, WTO appeals judges ruled in July 2019 that the United States did not fully comply with a previous ruling about tariffs that the U.S. government had put on Chinese solar panels, wind towers, and steel cylinders.

The judges in that case said China could impose retaliatory sanctions if the United States did not remove its penalties. The U.S. government has not and instead has challenged the validity of the WTO ruling, so now China is seeking retaliatory sanctions. The WTO said it will review the request.

China’s plea came as its deputy level trade officials continued to meet with their U.S. counterparts on a broader trade pact. And, despite China’s WTO request, the Office of the U.S. Trade Representative and China’s Commerce Ministry announced last Friday that the two countries are “close to finalizing” phase one of a bilateral trade deal. In a statement, the USTR said the two sides have “made headway on specific issues and the two sides are close to finalizing some sections of the agreement” and they promised “discussions will go on continuously at the deputy level, and the principals will have another call in the near future.”

That statement also came after the U.S. Department of Commerce announced its final determinations in antidumping and countervailing duty investigations of aluminum wire and cable from China. Under the ruling, the products face final anti-dumping and countervailing duties ranging from 33 percent to 166 percent. Click here to read the full announcement. The International Trade Commission is scheduled to make its final determinations in this matter on or about December 2, 2019.

In related news: last Wednesday, the USTR released a third batch of product exclusions granted for products under List 3 tariffs on Chinese products. Click here to review the list. The USTR also recently announced the exclusion process for List 4 products. Click here for information.