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US-China WTO Dispute: A Test of Multilateral Trade Principles

BusinessUS-China WTO Dispute: A Test of Multilateral Trade Principles

The World Trade Organization’s (WTO) dispute settlement panel recently released a report backing the US’ appeal. The report highlights that the additional tariffs imposed led to rates on US products surpassing those outlined in China’s Schedule. This unusual support for the US prompted a swift and triumphant response from Washington. The US Trade Representative’s Office promptly welcomed the WTO’s conclusion, labeling China’s actions as “hypocritical” for suing the US in the WTO while retaliating with unilateral tariffs. The US seemingly played the “victim” while acting as the transgressor.

It’s essential to contextualize this. The roots of this dispute trace back to March 2018, when the US slapped tariffs on steel and aluminum products from various WTO members, including China, under the guise of “national security.” This move led several members, including China, to invoke the WTO’s dispute resolution mechanism. By December 2022, a panel concluded that these US measures breached WTO regulations.

Yet, the US’s response to this unfavorable ruling demonstrated an entirely different posture. Instead of respecting the ruling, it sought various avenues to hinder its implementation, sidestepping its responsibilities and persisting with non-compliant tariffs. This behavior underscores the selective approach the US takes towards WTO rulings. The same rules they previously dismissed are now leveraged to point fingers at others. This selective application is a stark manifestation of hypocrisy, double standards, and even extreme arrogance.

Such overtly aggressive tactics can’t be met with silence. Inaction would merely embolden further disdain for international trade rules. Therefore, China, rightfully protecting its rights, appealed to the WTO and initiated countermeasures against the US’s unfair practices. Notably, China isn’t alone in its response. Several global economies, such as the European Union, Canada, Mexico, and more, mirrored this strategy.

Some international media narratives suggest the recent WTO report favors the US over China. This viewpoint is somewhat misleading. This particular report is just a fragment of a more extensive “case within a case.” The entire picture isn’t represented solely by this report. China has acknowledged the report and intends to engage with it based on WTO stipulations. Importantly, the panel’s opinion isn’t the final say; the appellate body’s decision holds that weight. Even though the appellate body’s operations are currently halted, the legal pathway remains intact. China, within its rights, can decide on further appeal actions based on the WTO’s framework. Central to this case, as the Chinese side underscores, is the US’s unilateral and protectionist measures.

This situation isn’t as intricate as it may seem. If the US rescinds its unlawfully established tariffs, wouldn’t that resolve the core issue? Ideally, the US would retract, but instead, it vehemently demands WTO reforms to meet its desires while expecting oppressed nations to remain passive. The audacity with which the US disregards international trade rules for personal gain, only to later chastise nations that stand up to such bullying, is astounding.

China’s Ministry of Commerce took an unprecedented step by unveiling the “2023 Report on WTO Compliance of the United States.” This detailed report underscores how the US has continually exploited the global multilateral trading arena. Utilizing its economic clout and the US dollar’s dominance, the US has historically resorted to trade coercion. Furthermore, its practice of double standards in industrial policies has induced global industrial chain disruptions. A prevalent global sentiment seems to be that the US adheres to international rules selectively, embracing them when beneficial and dismissing them when inconvenient.

Nevertheless, China remains steadfast in not compromising its national interests merely to placate Washington. China’s stance isn’t solely about self-preservation; it’s also about upholding a rules-based global trading framework. The tariff altercation, ignited by Washington, was fundamentally flawed from its inception. Regardless of any political perspective, its adverse nature remains undeniable. A united international front against such strong-arm tactics is paramount for preserving a multilateral rules-driven global trade system.

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