WTO Rules in Favor of China in Trade Dispute...Blow to Trump's Key Policy (Comprehensive)

US $234 Billion Goods Tariff Imposed Deemed Non-Compliant with Rules
US Calls It "Completely Inappropriate," China Says "US Fails to Prove Tariff Legitimacy"
Concerns Over US-WTO Conflict Escalation

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] On the 15th (local time), the World Trade Organization (WTO) ruled in favor of China in the dispute over tariffs imposed by the Donald Trump administration on China. This decision dealt a blow to the tariffs, which President Trump has been using as a key weapon against China. There are expectations that the U.S. attacks on the WTO will intensify further.

According to the Associated Press on the same day, the WTO panel, which acts as the first instance, judged that the tariffs imposed by the U.S. on Chinese products worth approximately $234 billion (about 276.1 trillion KRW) were inconsistent with trade regulations. The panel also pointed out that the U.S. failed to demonstrate how the targeted Chinese imports were related to China's intellectual property (IP) theft, urging both countries to "make greater efforts to achieve a satisfactory resolution."

The AP reported that this ruling is the WTO's first judgment on the series of tariff policies imposed by the Trump administration on goods from other countries.

Previously, the U.S. imposed additional tariffs on Chinese products in 2018 under Section 301 of the Trade Act, citing unfair government subsidies and IP infringement by China, to which China responded by filing a complaint with the WTO.

China welcomed the ruling, but the U.S. immediately opposed it. Robert Lighthizer, U.S. Trade Representative (USTR), stated in a press release that the ruling was entirely inappropriate and said, "The Trump administration will not allow China to use the WTO to exploit American workers, businesses, farmers, and ranchers."

The Washington Post described the ruling as "shaking the core of President Trump's trade war against China" and said it "inflicted diplomatic wounds on the 'America First' approach."

The U.S. can appeal the ruling within 60 days if it disagrees, but the WTO's Appellate Body, which serves as the final instance, is currently non-functional because the U.S. has not appointed any members. Therefore, it is uncertain whether the WTO's final judgment process can proceed. This is why there is a view that the ruling will not have a substantial impact on U.S. tariff policy. Lighthizer emphasized, "It is important to note that the report does not affect the historic Phase One trade agreement between the U.S. and China."

Instead, the U.S. offensive against the WTO is expected to expand further. The U.S. had conflicts with the WTO even before President Trump's inauguration, but the intensity increased after the Trump administration took office. Following the early resignation announcement of WTO Director-General Roberto Azev?do in May, President Trump strongly criticized the WTO, saying, "The WTO is terrible. We have been treated very badly," and accused the WTO of giving special treatment to China. President Trump holds the view that China has engaged in unfair trade practices since joining the WTO in 2001, but the WTO has turned a blind eye.

On the same day, President Trump said, "Because the WTO has allowed China to do whatever it wants, we have to do something about the WTO." This could imply the possibility of the U.S. withdrawing from the WTO. The U.S. has already announced its intention to withdraw from the World Health Organization (WHO), with which it has had conflicts, and has already withdrawn from UNESCO.

The WTO issue is also intertwined with the November presidential election. President Trump continues to criticize Democratic presidential candidate Joe Biden, who supported China's accession to the WTO, saying that China has expanded its influence since joining the WTO.

Chinese media unanimously welcomed the WTO ruling. The state-run Global Times reported that China achieved a major victory in the tariff war with the U.S. through the WTO ruling. The newspaper emphasized, "This ruling delivered a significant victory to China and dealt a heavy blow to the U.S. government," adding, "It failed to justify the legitimacy of the U.S. tariff imposition."

Gao Lingyun, a researcher at the Chinese Academy of Social Sciences, said in an interview with the Global Times, "This ruling is a moral victory, but it differs from anti-dumping or countervailing duty rulings that have legal repercussions," and predicted, "There will be no change in the U.S.'s unfair trade policies."

Song Guoyou, director of the Economic Diplomacy Center at Fudan University, predicted, "Because the Trump administration has repeatedly ignored international rules and norms not only in trade but also in other areas, it seems unlikely that the U.S. will accept the WTO ruling."

Mei Xinyu, a researcher at the International Trade and Economic Cooperation Institute of the Chinese Ministry of Commerce, evaluated, "Despite the U.S.'s attempts to paralyze the WTO dispute settlement body, this ruling demonstrated the resilience and capability of multilateral organizations," adding, "This will be the biggest warning to the U.S."

This content was produced with the assistance of AI translation services.