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U.S., Mainland China Take Trade Dispute to WTO

The United States on 16 July filed separate dispute settlement cases at the World Trade Organisation against mainland China, the European Union, Canada, Mexico and Turkey, challenging the tariffs each of these WTO members imposed in response to President Trump’s Section 232 tariffs on steel and aluminium imports. Separately, Beijing has filed a WTO complaint against the U.S. proposal to impose an additional 10 percent tariff on US$200 billion worth of imports from the mainland.

The Office of the U.S. Trade Representative contends that the Section 232 steel and aluminium duties are justified under international agreements the United States and its trading partners have approved but the retaliatory duties on U.S. exports imposed by mainland China, the EU, Canada, Mexico and Turkey “are completely without justification under international rules.” According to U.S. Trade Representative Robert Lighthizer, instead of working with the United States to address a common problem “some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies.” Lighthizer added that the United States “will take all necessary actions to protect our interests” and urged U.S. trading partners to “work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors.”

The retaliatory actions taken by the aforementioned U.S. trading partners consist of the following:

  • in the case of mainland China, additional duties of 15 to 25 percent on US$3 billion worth of imports from the United States, effective from 2 April;
  • in the case of Canada, 10 to 25 percent duties on US$12.7 billion worth of imports from the United States, effective from 1 July;
  • in the case of Mexico, 7 to 25 percent duties on US$3.6 billion worth of imports from the United States, effective from 5 June or 5 July;
  • in the case of Turkey, additional duties of 4 to 70 percent on US$1.8 billion worth of imports from the United States, effective from 21 June; and
  • in the case of the EU, 10 to 25 percent additional duties on US$3.2 billion worth of U.S. goods, effective from 22 June, as well as 10 to 50 percent additional duties on US$4.2 billion worth of U.S. goods, effective from 1 June 2021.

Separately, mainland China has filed an additional WTO case against a U.S. proposal to impose a ten percent duty on approximately US$200 billion worth of imports spanning 6,031 tariff lines from mainland China. This action would be in addition to the 25 percent tariff imposed on US$34 billion worth of mainland Chinese goods effective 6 July and a proposal to extend that tariff to an additional US$16 billion worth of imports from the mainland at some yet-to-be-determined date. These actions follow a Section 301 investigation determination that mainland China’s acts, policies and practices related to technology transfer, intellectual property and innovation are “unreasonable and discriminatory.” The proposed 10 percent duty could be imposed sometime after 30 August, which is the deadline for post-hearing rebuttal comments.

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