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WTO finds United States tariffs on China violated trade rules

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A panel from the World Trade Organization ruled on Tuesday that the tariffs imposed by the United States on more than $200 billion of Chinese products in 2018 was illegal. The three person panel concluded it was inconsistent with global trading rules.

A three-person panel ruled that the United States has not shown why the tariffs were justified. In addition to being above the committed maximum rates, the panel found that the tariffs were inconsistent with trading rules because they only applied to China. The Trump administration said the tariffs were necessary to confront China’s violations of intellectual property, innovation, and forced technology transfer policies.

In the report, the panel said, “that the United States had not met its burden of demonstrating that the measures are provisionally justified.” The panel also recommends the two countries find a satisfactory agreement between themselves. 

U.S. Trade Representative Robert Lighthizer criticized the panel report that stated that actions taken by the U.S. to combat China’s theft of American technology and intellectual property were inconsistent with WTO rules.  

“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,” said Ambassador Lighthizer.  “Although the panel did not dispute the extensive evidence submitted by the United States of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct.  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.  It is important to note that this report has no effect on the historic Phase One Agreement between the United States and China, which includes new, enforceable commitments by China to prevent the theft of American technology.” 

The United States has 60 days to appeal the decision under WTO rules. 

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