July 22, 2019

WTO Rules For China In Dispute Case Involving U.S. Tariffs

In a decision issued last week, the World Trade Organization (WTO) ruled against the United States in a tariff dispute case brought by China in 2012 in response to U.S. tariffs on goods subsidized by Chinese state-owned enterprises. The WTO acknowledged China subsidizes some materials, but also said the United States must accept Chinese pricing when calculating tariffs.

Specifically, the WTO decision said that the way the U.S. calculated its duties using third-country prices was not consistent with WTO anti-subsidy rules. The WTO gave the Chinese government the option to impose retaliatory measures if the U.S. does not comply with last week’s ruling.

The Chinese Ministry of Commerce praised the decision and urged the U.S. to immediately take concrete actions to correct its actions.

According to Politico, in a statement, U.S. Trade Representative Robert Lighthizer said the ruling “undermines WTO rules, making them less effective to counteract Chinese [state-owned enterprise] subsidies that are harming U.S. workers and businesses and distorting markets worldwide.”

As FastmarketsAMM (subscription required) reported, “The 22 products covered in this case had been the subjects of 17 investigations by the US Department of Commerce between 2007 and 2012. Goods named in the case include aluminum extrusions, oil country tubular goods (OCTG), line pipe, seamless pipe and solar panels, among others.”