China wrongly imposed retaliatory tariffs against U.S. products including pork, wine, and fruits and nuts in response to Trump-era tariffs on aluminum and steel imports, said a WTO dispute panel on Wednesday. The trade war levies were an additional 25 percent on pork and an additional 15 percent on fruits and derived products.
The United States said its aluminum and steel tariffs were a national security issue exempt from trade rules. China “illegally retaliated with sham ‘safeguard’ tariffs,” said spokesperson Sam Michel of the U.S. trade representative’s office. “The United States condemns China’s refusal to correct its severe and persistent non-market excess capacity for steel and aluminum that is at the heart of a global crisis that led to the U.S. Section 232 national security actions.”
U.S. food and ag exports slumped more than 9 percent during the volleys of tit-for-tat tariffs late last decade. China and the U.S. declared a truce in early 2020. Some of the tariffs remain in force and others were shelved temporarily. China is the No. 1 customer for American farm exports, with purchases forecast at $34 billion in the current trade year.
WTO panel reports are open to appeal for 60 days after they are released. If China were to appeal, it would effectively void the ruling, since the WTO appellate body is out of operation because of a lack of judges. The Chinese Commerce Ministry said it was studying the WTO panel ruling, reported the South China Morning Post.
China imposed the retaliatory tariffs in response to the Trump administration announcement in March 2018 of 25 percent tariffs on imports of steel and 10 percent tariffs on imported aluminum. At the same time, it asked for consultations under WTO rules. The Trump administration said the Chinese tariffs violated the most-favored-nation standard of equal treatment in trade.
As of early August, China had purchased 155,200 tonnes of U.S. pork this year, roughly the same amount as at this time last year, according to USDA data. Mexico was the top pork destination, with sales of 447,700 tonnes, followed by sales of 159,400 tonnes to Japan.
The WTO dispute panel report is available here.