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Mainland China Asks WTO to Review U.S. Section 301 Tariffs

During an 18 December meeting of the World Trade Organisation Dispute Settlement Body, mainland China requested the establishment of a dispute settlement panel to consider whether the U.S. Section 301 tariffs on imports of some US$250 billion worth of mainland Chinese goods violate WTO rules. A supplementary tariff of 25 percent is in effect on some US$50 billion worth of U.S. imports from mainland China while an additional US$200 billion worth of imports currently face a 10 percent tariff. Mainland China argued before the Dispute Settlement Body that these tariffs violate WTO rules and should therefore be of concern to the membership.

As expected, the United States blocked mainland China's panel request, calling it a threat to the integrity of the WTO dispute settlement system. The United States has filed a WTO dispute of its own against mainland China's technology licencing procedures and argues that mainland Chinese practices involving forced technology transfer, cybersecurity concerns and restrictions on ownership are not covered by current international trade rules but cause harm which justifies the imposition of penalty tariffs under Section 301. The United States also called mainland China's panel request hypocritical for calling the U.S. measures uni-lateral, since mainland China has imposed additional tariffs of its own on U.S. products.

Under WTO rules, the United States was able to block the first panel request but cannot block a second request, which can occur at the next Dispute Settlement Body meeting scheduled for 28 January.

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