China trade tensions still simmer after deal

Galtero Lara
Octubre 22, 2019

China will ask the World Trade Organisation for permission to impose tariffs on Dollars 2.4 billion worth of United States goods as compensation in a dispute that dates back to 2012, documents showed Monday.

China took the case to the WTO's Dispute Settlement Body (DSB), arguing the United States counter-measures breached worldwide trade rules, ultimately winning a partial victory.

China continued to be the "serial offender" of the WTO's subsidies agreement, the USA delegation said then.

At issues in the dispute are countervailing measures imposed by the U.S. that affected items including thermal paper, pressure pipe and kitchen shelving.

But the case was initiated in 2012 after former USA president Barack Obama's administration slapped duties on Chinese products ranging from thermal paper to solar panels and drill pipe. But US officials in Geneva and Washington had no further comment about the case on Monday.

The case wound its way for several years through the WTO's complex dispute settlement in process.

Washington and Beijing are still engaged in trade talks over disagreements that have caused a major tariff war.

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China went to the WTO in 2012 to challenge US anti-subsidy tariffs, known as countervailing duties, on Chinese exports including solar panels, wind towers, steel cylinders and aluminum extrusions, exports that China valued at $7.3 billion at the time. The United States could challenge the amount of retaliatory sanctions sought, which could send the long-running dispute to arbitration.

The ruling also said the United States must accept Chinese prices to measure subsidies, even though USTR viewed those prices as "distorted".

"The WTO appellate report undermines WTO rules, making them less effective to counteract China SOE subsidies that are harming U.S. workers and businesses and distorting markets worldwide", the office of U.S. Trade Representative Robert Lighthizer said.

US tariffs on China due in December might be halted if the first phase of trade talks between the two sides go well, White House economic adviser Larry Kudlow told Fox Business Monday.

But U.S. Commerce Secretary Wilbur Ross on Monday said it was more important to get details of the deal right than meet a specific deadline.

Trump said the deal includes China agreeing to raise its US agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services.

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