US calls for reforms after WTO rules in favour of China in tariffs case

The World Trade Organisation (WTO) has ruled against the United States in a case that was taken to the intergovernmental body by China over violations of international trading rules by Washington as it imposed tariffs on goods from Beijing. The WTO panel found that the United States had breached global trading rules because billions of dollars worth of tariffs imposed by Washington only applied to Chinese goods.

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Trump administration in 2018 imposed multibillion-dollar tariffs on China accusing the Chinese side of stealing intellectual property rights and forcing American companies to transfer technologies. The panel found the duties to be inconsistent because they were applied in excess of the rates to which the United States bound itself in its Schedule of Concessions. The panel in its report further found that the United States has not demonstrated why the measures are provisionally justified.  

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US wants reforms

Meanwhile, the United States Trade Representative (USTR) Robert Lighthizer criticized the World Trade Organization (WTO) panel report that stated actions taken by Washington were inconsistent with global trading rules. "This panel report confirms what the Trump Administration has been saying for four years:  The WTO is completely inadequate to stop China’s harmful technology practices," said Ambassador Lighthizer. The United States also called for reforms in the international trade body.

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The panel in its conclusion further noted that the United States is yet to challenge China's retaliatory measures, which is why it only looked into Washington's measures. "Government of the United States has not, up to the present time, initiated action under the WTO Dispute Settlement Understanding with respect to any measures China has imposed in response to the United States' measures at issue in this dispute," the panel report said in its concluding comments.

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It is important to note that the panel report will have no effect on US tariffs on Chinese products. Washington and Beijing reached a historic Phase One Agreement in January this year which includes new, enforceable commitments by China to prevent the theft of American technology. Phase Two of the trade deal between the US and China was scheduled to happen this summer but has been postponed by the Trump administration until November 3 presidential election.