In recent news, China has raised an objection at the World Trade Organization (WTO) in response to the increased import tariffs by the US. The US, however, defended its move as a retaliation to China’s alleged distortive technological transfer policies. This event has caused a significant escalation in the trade war waged between the two nations. Experts project that Chinese exports upwards of $300 Billion will be impacted as a result of the American action.
Tariffs Imposed amidst Consensus
Contrary to the consensus reached during a meeting in Osaka between the heads of states of China and the United States, the US has imposed a 15% tariff on an array of Chinese goods. In a tit-for-tat response, China slapped new duties on US crude oil, thus adding fuel to the fire of the ongoing trade war.
China’s Legal Battle with WTO
This incident marks the third occasion where China has lodged a legal suit at the WTO aiming to challenge the US protectionist policy against Chinese exports. However, the US defended its actions, stating that such measures were instrumental in penalizing China’s unfair technology-transfer policies. According to them, these measures serve the purpose of preserving public morals—a clause which has been used previously to argue for trade restrictions due to issues such as animal rights, gambling, and public broadcasting.
Intellectual Property Rules Excluded From WTO
The regulations governing intellectual property rights (IPR) aren’t covered under the WTO. As per the rules of WTO, the United States possesses a duration of 60 days to try and resolve the prevailing dispute with China. Post this period, China can request WTO to intervene and adjudicate in the matter.
| Events | Description |
|---|---|
| US imposes additional tariff on Chinese goods | The US recently imposed an additional 15% tariff on various Chinese goods |
| China retorts with new duties on US oil | In response, China imposes new tariffs on US crude oil |
| China seeks legal aid from WTO | This marks the third occasion where China has challenged US protectionism policies at the WTO |
The Road Ahead
China’s decision to retaliate without the approval of WTO only serves to exacerbate trade tensions between the two nations. If the US is found to be in violation of the rules, China, with the WTO’s approval, can respond reciprocally against the trade sanctions. Despite being a time-consuming procedure, settling disputes via international conventions and rules is integral to maintaining global economic equilibrium.
