U.S. Appeals WTO Ruling That Trump’s China Tariffs Were Illegal

The Trump administration on Monday appealed a World Trade Organization dispute ruling that said American tariffs on more than $234 billion of Chinese exports violated international rules, a move that rendered the decision effectively moot.

That’s because the U.S. has already paralyzed the WTO’s appeals process by blocking the appointment of new panelists to its appellate body.

China criticized Washington’s decision to take advantage of appellate body’s state of limbo and touted the ruling as a victory for the multilateral trading system against unilateralism, according to prepared remarks obtained by Bloomberg.

Meanwhile, the Trump administration defended its tariff strategy and said the ruling will have no bearing on December’s phase-one trade agreement with China, which created an economic truce between the world’s largest economies.

A representative from the U.S. delegation to the WTO said tariffs were the only available way to address the major problems resulting from China’s forced technology transfer policies, according to prepared remarks obtained by Bloomberg.

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The dispute centers on the Trump administration’s use of a 1970s-era U.S. law to unilaterally launch its trade conflict against China in 2018.

Last month a panel of three WTO experts said the U.S. broke global regulations when it imposed tariffs on Chinese goods in 2018, saying “the United States had not met its burden of demonstrating that the measures are provisionally justified.”

The U.S. lodged the appeal Monday because the ruling was based on fundamental legal errors, the delegate said. The ruling is acknowledgment that the WTO process impedes improvements in the global trading system, the delegate said.

The U.S. delegation said its tariffs were successful in resolving the U.S.-China trade conflict because it resulted in the preliminary trade agreement, which encouraged Beijing to end some of its unfair technology transfer practices.

But China countered that the Trump administration’s tariffs have only succeeded in harming American consumers, businesses, and the multilateral trading system.

©2020 Bloomberg L.P.

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