World Trade Organization Rules US China Tariffs Illegal, Recognized Chinese Intellectual Property Theft

The U.S. imposed $400 billion in tariffs on Chinese goods between March 2018 and September 2019

The tariffs were imposed in retaliation for the theft of intellectual property by Chinese concerns

The WTO ruling recognized the validity of the allegations against China but said the U.S. should have sought dispute resolution first

The World Trade Organization ruled Tuesday the $400 billion in U.S. tariffs imposed on some Chinese goods since 2018 violated international rules, but the investigative panel did not propose any remedy.

WTO said it did not dispute U.S. allegations of intellectual property theft by China but said the Trump administration had failed to meet the “burden of demonstrating that the measures [taken] are provisionally justified” by WTO rules.

The ruling has no practical effect, especially since the administration can file an appeal within 60 days, which will keep the issue tied up because the WTO appellate division is virtually paralyzed since the U.S. has refused to appoint new members.

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Tuesday’s ruling came in response to a complaint filed by China in which Beijing alleged the tariffs had violated WTO most-favored treatment provisions. It also alleged the U.S. violated the trade dispute resolution process by not seeking dispute resolution before imposing the levies.

The U.S. did not file any counterclaim despite $130 billion in tariffs imposed by China during the same period.

“The United States has not presented to the panel any refutation of China's assertion that the measures are inconsistent with [WTO rules],” WTO concluded.
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