Tariffs on China are illegal

Tariffs on China are illegal

The US responded defiantly on Tuesday to a World Trade Organization report criticizing President Donald Trump's tariffs on China, blasting the organization as "completely inadequate" in holding Beijing accountable.

China also alleged the tariffs violated a key dispute settlement rule that requires countries to first seek recourse from the WTO dispute settlement body before imposing retaliatory tariffs against another country.

Coalition for a Prosperous America (CPA) Chairman Dan DiMicco, who previously advised Trump on trade issues, said the ruling reveals the WTO's "utter contempt for USA interests." said CPA Chair Dan DiMicco. Trade Representative Robert Lighthizer insisted the U.S. must be allowed to "defend itself" against unfair trade practices and maintained the ruling would not affect Phase I of the proposed trade agreement between the USA and China.

Lighthizer said the WTO verdict would have "no effect on the. agreement between the United States and China, which includes new, enforceable commitments by China to prevent the theft of American technology".

Trump threatened tariffs on $500 billion worth of goods during his two year trade war with China, before signing a "Phase 1" trade deal with Beijing early this year. Washington has imposed levies on US$400 billion in Chinese exports.

"The panel found, accordingly, that the U.S. had not met its burden of demonstrating that the measures are provisionally justified", it said.

"The United States had not met its burden of demonstrating how its restrictions contributed to protecting its public morals and did not extend beyond what was necessary", it said.

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The US report had cited thousands of pieces of evidence showing China's unfair trade practices, which "have cost US innovators, workers, and businesses billions of dollars every year", his statement said.

The U.S. argued that China's actions had amounted to "state-sanctioned theft" and "misappropriation" of U.S. technology, intellectual property and commercial secrets. The US can appeal the decision at any time within 60 days, an act which would essentially veto it, since Washington has hamstrung the WTO's appellate department by refusing to appoint a representative to it.

But that process has been complicated since the WTO Appellate Body, sometimes called the supreme court of world trade, stopped functioning in December after years of relentless U.S. opposition.

The European Union, China and a long line of other countries have launched a temporary system for appealing trade dispute rulings, but the United States is not participating.

Noting "unprecedented global trade tensions", the three-person panel encouraged the two sides to work to resolve the overall dispute.

The United States could appeal against Tuesday's ruling.

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