Last week the Word Trade Organization (WTO) handed down a decision in a trade dispute between the United States and the People’s Republic of China, finding that the latter acted out of step with its obligations to the WTO by levying further tariffs on American imports in retaliation for US tariffs on Chinese aluminium and steel.
The Chinese tariffs at issue came in response to Section 232 aluminium and steel tariffs enacted in the spring of 2018. The across-the-board 10 percent aluminium tariffs and 25 percent steel tariffs were imposed by the Trump Administration under the auspices of national security.
Responding to the blanket aluminium and steel tariffs, Beijing enacted new tariffs of between 15 percent and 25 percent on various American imports. Washington, D.C. immediately challenged the move at the WTO, leading to Wednesday’s decision.
The office of the U.S. Trade Representative warmly greeted the decision last week, opining that the Chinese government “illegally retaliated with sham ‘safeguard’ tariffs.”
Meanwhile, regulators in Beijing came out swinging against the WTO decision, asserting that Washington, D.C. must withdraw its Section 232 blanket tariffs on aluminium and steel.
The Section 232 tariffs on aluminium and steel have been a bone of contention with several countries and trade zones since they were enacted in 2018. The Trump Administration granted few limited exceptions to the tariffs, but those exceptions have been few and far between.
Imposition of the Section 232 tariffs led to an immediate flurry of challenges at the WTO and various retaliatory measures, many of which are still being ironed out by the parties involved.