US and China trade war may escalate after the latest WTO ruling

President Donald Trump listens during a Cabinet meeting in the Cabinet Room of the White HouseAP

  • US President Donald Trump is going up against the World Trade Organisation (WTO) after miscalculating anti-subsidy tariffs against China.
  • Despite the global trade watchdog’s ruling back in 2012, the US has failed to remove excess tariffs against Chinese subsided goods like solar panels, wind towers, and steel cylinders etc.
  • WTO has warned that if the US continues to undermine the global organisation, it could face Chinese sanctions.
Trade tensions between China and the US are all set to worsen a the World Trade Organisation ( WTO) opens the doors for Chinese sanctions on US goods.

The global trade watchdog is calling on the US to fix a mistake that was pointed out back in 2012. The US miscalculated the anti-subsidy tariffs levied against Chinese exports valued at $7.3 billion at the time.

The trade organisation also pointed that the US had to accept Chinese to measure subsidies even if the US Trade Representative (USTR) saw them as ‘distorted’.

So far, the US has not complied with the ruling and if it doesn’t fix the mistake even now, China is within its rights to impose its own sanctions on American goods, according to the WTO.

It’s a stand-off between the USTR and the Chinese Commerce Ministry with the WTO trying to relieve some of the trade pressure that’s spilling over onto the global economy.

This conclusion ignores the findings of the World Bank, OECD working papers, economic surveys, and other objective evidence, all cited by the United States.

Statement by USTR

Point of impact

The global trade watchdog already expressed its displeasure on the US-China trade war causing a ‘dramatic spike’ in trade barriers and now its calling on the US to fix its mistake.

Neither, China or the US, seem to be in the mood to back down.

Zhang Lifan, Zhang Lifan, a Beijing-based commentator, stated, “China is in no hurry to reach a deal and ready for protracted talks.”

Scott Kennedy, an economist with Washington-based think tank the Centre for Strategic and International Studies, told SCMP that Zhong Shan’s — China’s commerce minister — greater prominence meant China had lost interest in addressing US concerns in the talks.

The Asian nation is already looking to sanction American companies for selling arms to Taiwan and Donald Trump, the US President, stated that since China wasn’t buying enough agricultural produce from the US — like it apparently promised — he might impose tariffs on Chinese goods worth $325 billion.
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