WTO's China tariff ruling warns US that multilateralism will continue without it: expert
Published: Sep 16, 2020 01:10 AM

Photo taken on July 15, 2020 shows an exterior view of the World Trade Organization (WTO) headquarters in Geneva, Switzerland. (Photo by Li Ye/Xinhua)

China's Ministry of Commerce (MOFCOM) said on Tuesday night that it respects the WTO's ruling that US tariffs on hundreds of billions of dollars' worth of Chinese products violated international trade rules, and urged the US to take "concrete actions" to jointly safeguard the trade multilateral system. 

A panel of experts at the WTO ruled on Tuesday that the US tariffs imposed on more than $200 billion worth of Chinese products under its so-called Section 301 domestic trade act violated global trade regulations, offering a big win to China and a major blow to the US government.

While the impact of the WTO's ruling on the US might be limited, it showed that the multilateral body still functions despite the US' ill-advised disruptions, and offered a big win to China and sent a stern warning to the US that multilateralism and economic globalization will continue without it, Chinese experts noted.

"In light of its conclusion that the United States has not adequately explained how the measures chosen by it are necessary to protect public morals, the United States has not met its burden of demonstrating that the measures are provisionally justified," the WTO panel said in a statement.

Commenting on the WTO's ruling, the MOFCOM said in a statement that China's move to challenge the US' "wrongful actions" at the WTO was to protect its own legal rights and interests and showed China's respect for WTO rules and its resolve to preserve the multilateral trade system."

"[China] always respects the WTO's rules and rulings and also hopes the US could fully respect the expert panel's ruling as well as the rules-based multilateral trade system and take concrete actions to meet China and other WTO members halfway to preserve the multilateral trade system," the MOFCOM said.

While the WTO's ruling on Tuesday offered a huge win for China and dealt a major blow to the US government, its ramifications for the US remain unclear and the impact on the US bullying trade tactics will likely be limited, Chinese experts noted.

 "It shows that the WTO supports the rational appeal made by China under the WTO framework, and it is key to maintaining the global multilateral trade system," Song Guoyou, director of Fudan University's Center for Economic Diplomacy, told the Global Times on Tuesday.

Chinese officials have long criticized the US moves as against WTO rules. Apart from taking the US to the WTO, China has also mounted a fierce counter campaign against the US tariffs war. The two sides signed a phase one trade agreement in January, but much of their tariffs on each other's products remain, though they have moved to exempt some products.

"The ruling makes moral sense, but it's unlike anti-dumping or anti-subsidy rulings that would have legal repercussions," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, and a close follower of China-US trade frictions, told the Global Times on Tuesday.

While the WTO's ruling is unlikely to change US bullying trade policies, it could allow China to continue the multilateral approach to expand its friends circle, while preparing for countermeasures against the US on an equal footing. 

The WTO ruling could offer some relief for other economies, as the US has also threatened to slap tariffs on products from the EU under its Section 301 trade policy, experts noted.

However, the US will unlikely accept the WTO's ruling, as the Trump administration has repeatedly disregarded international rules and norms in not just trade but also in other areas, Song noted. The US has even single-handedly blocked an appointment to the WTO's crucial dispute settlement body, and rejected reforms supported by other members.

"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," US Trade Representative Ambassador Robert Lighthizer said in a statement. "The United States must be allowed to defend itself against unfair trade practices, and the Trump Administration will not let China use the WTO to take advantage of American workers, businesses, farmers, and ranchers."

All told, Washington has 60 days to appeal the decision under WTO rules. The move could trigger Beijing to ask the WTO to adjudicate, which could last over a period of several years.

However, the WTO's ruling showed the multilateral body's resilience and capability, despite the US' ill attempt to cripple its dispute settlement body, said Mei Xinyu, a research fellow at the Ministry of Commerce's Chinese Academy of International Trade and Economic Cooperation.

"It's like the WTO has just completed a stress test where it operates without the US. This is probably the biggest warning to the US: without you, economic globalization will continue," Mei told the Global Times on Tuesday.