China Opens WTO Dispute on US Reciprocal Tariffs at WTO
China opened a dispute at the World Trade Organization on April 8 on the U.S. reciprocal tariffs, claiming that the duties violate the General Agreement on Tariffs and Trade (GATT) 1994, the Agreement on Customs Valuation and the Agreement on Subsidies and Countervailing Measures. China's challenge covers the 34% additional tariff on Chinese imports that is set to take effect April 9, along with the 10% duty on imports from all trading partners, which took effect on April 5.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The complaint said that Chinese goods will be subject to both the 10% and 34% tariffs, arguing that the measures "seriously undermine the rules-based multilateral trading system, and are discriminatory and protectionist in nature." China also bemoaned the "U.S. content" piece of the tariffs, which exempts the U.S. content of an import from the tariffs.
China launched five distinct legal claims against the reciprocal duties, three of which pertain to GATT 1994. The complaint said that the measures violate the agreement, since they fail to impose the same duties on Chinese products as on all other nations and set rates above those found in the U.S. schedule of commitments. China added that the U.S. is not administering the tariffs "in a uniform, impartial, and reasonable manner."
The complaint also said the tariffs violate the Customs Valuation Agreement, since the U.S. "fails to use the transaction value" as the "basis for customs value" when it excludes the value of U.S. content of the imported products from the application of the additional tariffs. The U.S. "applies unjustified adjustment or valuation methods for customs purposes," the complaint said.
China also said the tariffs violate the Subsidies and Countervailing Measures deal, since the U.S. provides subsidies contingent "upon export performance and the use of domestic over imported goods" within the meaning of the deal by excluding the value of the U.S. content of the imported products.
In a statement last week on the reciprocal tariffs, WTO Director-General Ngozi Okonjo-Iweala said the trade body "was established to serve precisely in moments like this -- as a platform for dialogue, to prevent trade conflicts from escalating, and to support an open and predictable trading environment." She encouraged members to use the forum to "engage constructively and seek cooperative solutions."