WTO rules Trump tariffs on Chinese goods illegal

The World Trade Organization (WTO) said Tuesday that President Trump’s tariffs on more than $400 billion in Chinese goods violate international trade regulations.

In a Tuesday report, a panel of three WTO adjudicators ruled that the U.S. was unable to prove its tariffs on Chinese products were necessary to level the global trade playing field. The ruling does not obligate the U.S. to scrap the tariffs, but finds that the Trump administration “has not met its burden of demonstrating that the measures are provisionally justified.”

Starting in 2018, the Trump administration imposed tariffs on imports from China in response to decades of alleged unfair trade practices committed by the Chinese government. The tariffs were issued under Section 301 of the Trade Act of 1974, which allows the White House to fight foreign trade policy it deems “unreasonable or discriminatory and burdens or restricts United States commerce.”

A March 2018 report from the Office of the U.S. Trade Representative — the administration’s top trade negotiator —justified tariffs on Chinese goods to counter the theft and forced transfer of intellectual property and valuable technology from U.S. firms by Chinese companies. 

U.S. firms have long complained of such practices by Chinese companies, which are closely tied to the Chinese government, saying China’s actions are unfair and damaging to American business and innovation.

Even so, the WTO panel ruled that the U.S. response did not follow the appropriate measures detailed under international trade rules meant to resolve disputes over unfair trade practices.

The ruling is not legally binding but will likely deepen tensions between the WTO and Trump, who has blasted the international trade arbiter throughout his presidency and has threatened to remove the U.S. from the organization.

“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 U.S. Trade Representative Robert Lighthizer in a Tuesday statement.

“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,” he added.

When asked about the ruling as he was leaving the White House, Trump appeared to be unaware of the WTO ruling, according to the White House press pool. 

“We’ll have to do something about the WTO because they’ve let China get away with murder,” Trump said. 

“We’ll take a look at that but I’m not a big fan of the WTO,” he continued.

The White House and the Chinese government struck a preliminary trade agreement in January in which the U.S. agreed to roll back some tariffs in exchange for a commitment from Beijing to drastically increase U.S. crop purchases and limit barriers to U.S. firms operating in China.

But the good will generated by the “phase one” deal evaporated a week later as the first cases of the virus that causes COVID-19 were confirmed in the U.S. The subsequent explosion of the pandemic deepened the feud between the Trump administration — who has blamed China for failing to control the coronavirus — and Beijing.

Tensions between the U.S. and China have also increased as administration officials and lawmakers in both parties increasingly call for a response to Beijing’s detainment, torture, reeducation and forced sterilization of Uighurs, a Muslim ethnic minority, in China’s northwestern Xinjiang province.

The Department of Homeland Security on Monday issued orders blocking the importation of products manufactured by forced Uighur labor in Xinjiang.

Updated at 4:46 p.m. Morgan Chalfant contributed.