US broke trade rules by imposing tariffs on China, WTO rules
The World Trade Organisation (WTO) has ruled that the US broke international trading law by imposing multi-billion dollar trade on China as a part of President Donald Trump's trade war against the US.
The ruling had angered the US, who say that President Trump's tariffs were justified because China was stealing American intellectual property and forcing US companies to transfer technology to access China's markets.
The WTO panel found the US guilty owing to them only applying for the US and their agreements were above the going rates asked for by the US. In their eyes, the US government had not given an adequate alibi concerning the level of the tariffs exposed.
In a statement following the ruling, U.S. Trade Representative Robert Lighthizer said: “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."
China supported the WTO's ruling and hopes the US could do the same.
However, the ramifications of the ruling will not be immediately felt by the US. The legal process may take years to reach any kind of agreement, after which, retaliatory measures may be imposed - steps which China already appear to have taken into their own hands.
The WTO admits it only looked into the US's involvement into the situation, without consulting the Chinese government's retaliation - a stance that Washington has not challenged.
The WTO compiled a 66-page report into the proceedings, providing all the evidence at hand of any wrongdoing.
“The panel is very much aware of the wider context in which the WTO system currently operates, which is one reflecting a range of unprecedented global trade tensions,” the 66-page report concluded.
The panel hastened the US to bring its demands in line with their recommendations, but also encouraged both sides to work together to reach an accord.
The panel said: “Time is available for the parties to take stock as proceedings evolve and further consider opportunities for mutually agreed and satisfactory solutions."
During the two-year trade war with Beijing, Trump threatened tariffs on nearly all Chinese imports totalling nearly $500 billion (€423.9 billion) worth of goods before the two countries signed a "phase one" deal back in January. Some tariffs are still in place on a total of $370 billion (€313.7 billion) and $61.16 billion (€51.7 billion) in duties have been collected since July 2018, US Customs data has shown.
Trump himself has described the WTO as "horrible," often threatening to quit.
However, at a town hall event hosted by ABC News on Tuesday, Trump continued to back a trade deal with China, saying they had been importing record amounts of American soybeans, corn and beef owing to their poor handling of the coronavirus pandemic.
Trump's threats to quit or reform the WTO may come to fruition soon, as the president admitted he's "not a big fan of the WTO - that I can tell you right now. Maybe they did us a big favour."
Margaret Cekuta, a former USTR official, now a principal with the Capitol Counsel lobbying firm, said: “It gives the administration ammo to say the WTO is out of date."
"U.S. officials could argue that the WTO’s inability to rule on intellectual property rights left it ill-prepared to deal with the global economy."
This would hardly be the first time the president has quite a global, multilateral organisation, as Trump has previously pulled the US out of UNESCO, and is currently planning to leave the World Health Organisation (WHO).
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