With US President Donald Trump touting the completion of a trade deal, China has won the World Trade Organization’s permission to impose $3.6 billion worth of retaliatory sanctions against the US.
The case, originating from 2016, extends through a US–China trade war in which Washington has imposed tariffs of 25 percent on at least $250 billion of Chinese goods, with Beijing placing tariffs at 5-25 percent on around $110 billion of US products.
Just days ago, the US president claimed that “phase one” negotiations with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in Chile were looking to “probably be ahead of schedule.” Trump also noted that the first phase of this deal would include a very large portion of what Washington and Beijing hoped to agree on.
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The WTO ruling may give Beijing some clout. The organization’s appeals judges agreed that the US was not in full compliance with a WTO ruling after Washington placed tariffs on Chinese solar panels, steel cylinders and wind towers.
In China’s big win, the WTO is allowing the country to impose higher tariffs than currently allowed by the global trade body, as well as giving China more freedom to target US products and sectors of its own choosing.
China’s willingness to seek approval from the WTO, rather than impose such sanctions on its own terms, shows that Beijing is willing to take a measured approach to resolution. Trump has previously threatened to withdraw from the WTO if the organization doesn’t “shape up.”
While the WTO decision does not take the potential for closing a trade deal off the table, it may raise complications as the US and China continue discussions. As a member of the organization, China has been the complainant in disputes just 20 times since 2001.
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