China's countermeasures on US' Section 232 tariffs a legitimate response: MOFCOM
Washington obstructs WTO ruling, ruins global multilateral trade system
Published: Aug 17, 2023 10:54 PM
A sign of the WTO on its headquarters in Geneva Photo: VCG

A sign of the WTO on its headquarters in Geneva Photo: VCG

It is the US that has ruined the global multilateral trade system with the WTO at the core, and China's countermeasure against US tariffs on steel and aluminum products is a "self-defensive" move that follows international practice, Chinese observers and officials said, following US trade office's groundless accusations against China's duty measures on Wednesday.

Dismissing a statement from the Office of the United States Trade Representative (USTR), China's Commerce Ministry late Wednesday said that China's countermeasures against the US Section 232 tariffs on steel and aluminum, which was imposed in 2018, are a legitimate act to safeguard its own rights and interests. 

The response comes after a World Trade Organization (WTO) panel issued a report on Wednesday regarding China's countermeasures. The USTR cited the ruling, claiming Chinese measure "has caused grave systemic damage to the WTO."

An official from the China's Ministry of Commerce (MOFCOM) said the ministry has taken note of the WTO panel report on Wednesday. It is studying the report and will follow up on it in accordance with the WTO rules.

The root cause of the problem in this case is the unilateral and protectionist moves of the US, the official said, adding that China's countermeasures were taken in accordance with the law and are legitimate actions to safeguard the country's legitimate rights and interests.

"The US insisted on going its own way, obstructed the entry into force of the expert panel's ruling, evaded its obligations, and refused to cancel the illegal tariff measures," the official said.

In December 2022, the WTO ruled the US Section 232 tariffs imposed on steel and aluminum products in 2018 on the grounds of national security contravened the organization's regulations, recommending the US to bring its actions into conformity. 

In 2018, the former Donald Trump administration used "national security" as a pretext to wave its tariff stick, including imposing tariffs on steel and aluminum products, which caused outrage among the international community. Many countries at that time filed lawsuits in the WTO, and the WTO made the ruling in 2022 as a response. But the US has not carried out any actions to implement the ruling to date.

"China demands that the US immediately cancel the steel and aluminum Section 232 measures that violate WTO rules and work with other WTO members in the same direction to maintain the rules-based multilateral trading system together," the MOFCOM official said.

Tian Yun, a veteran economist based in Beijing, said that because the US' actions have infringed upon China's legitimate interests, it is entirely reasonable and lawful for China to counteract through the WTO platform using relevant rules.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said that China is not the only country taking action as several other countries and economies, including the European Union, have also implemented retaliatory measures.

Chinese observers and officials also criticized the US for abusing national security and undermining the authority of the WTO and global trade system while shifting the blame onto China

It is clear that the US' misuse of national security to impose unlawful trade restrictions goes against WTO principles. The US' failure to comply with WTO rulings and its continued abuse of national security measures have seriously undermined the rules and authority of the WTO, Tu said.

According to him, the fundamental purpose of the US imposing Section 232 tariffs is to implement its trade protectionism, develop and protect its domestic industries, and revive its manufacturing sector. 

Since the beginning of the trade war launched by the Trump administration in 2018, the US has unilaterally imposed sanctions on countries including China, which posed a serious challenge to China's legitimate industrial rights and the fairness of WTO rules, Tian told the Global Times on Thursday.

By treating China as its main enemy and seeking confrontational behavior within the WTO, the US is effectively dividing the organization and posing a significant threat to the global trade system, Tu added.

The WTO's Appellate Body has been paralyzed since December 11, 2019 after the US blocked the appointment of new members, dealing a heavy blow to the multilateral trading system.

The possibility that the US has deliberately hindered the functioning of the WTO's Appellate Body to delay the ruling cannot be ruled out, which is why it has taken more than four years for the WTO to rule against the US' Section 232 tariffs, Bai Ming, deputy director of the international market research institute at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday.