Trump on tariffs ruling: I'm not big fan of WTO

The World Trade Organization found on Tuesday that the United States breached global trading rules by imposing multibillion-dollar tariffs in President Donald Trump's trade war with China, a ruling that drew anger from Washington.

WASHINGTON • US President Donald Trump said he was not aware of the World Trade Organisation (WTO) ruling on a trade dispute with China, but said he would take a look at it.

He reiterated that he was not a fan of the WTO, which said on Tuesday the US had breached global trading rules by imposing multibillion-dollar tariffs in Mr Trump's trade war with China.

Asked about the decision as he left the White House, Mr Trump said he had not seen it.

"Then we'll have to do something about the WTO because they've let China get away with murder," he said. "We'll take a look at that. But I'm not a big fan of the WTO - that I can tell you right now. Maybe they did us a big favour."

China's Foreign Ministry said yesterday the ruling by the WTO proved the US had been breaking international trading rules.

The WTO ruled that additional tariffs imposed by the US against China in 2018 were inconsistent with global trading rules.

Chinese ministry spokesman Wang Wenbin told a press briefing that China hoped the US would respect the ruling.

The Trump administration says its tariffs imposed two years ago on more than US$200 billion (S$271.5 billion) of Chinese goods were justified because China was stealing intellectual property and forcing US companies to transfer technology for access to China's markets.

But the WTO's three-member panel said the US duties broke trading rules because they applied only to China and were above maximum rates agreed to by the US. Washington had not then adequately explained why its measures were a justified exception, the panel concluded.

"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," US Trade Representative (USTR) Robert Lighthizer said in response.

The decision will have little immediate effect on the US tariffs and is just the start of a legal process that could take years to play out, ultimately leading to the WTO approving retaliatory measures if it is upheld - moves that China has already taken on its own.

 

The US is likely to appeal against Tuesday's ruling. That would put the case into a legal void, however, because Washington has already blocked the appointment of judges to the WTO's appellate body, preventing it from convening the minimum number required to hear cases.

The panel was aware it was stepping into hot water. It noted that it had looked only into the US measures and not China's retaliation, which Washington has not challenged at the WTO.

"The panel is very much aware of the wider context in which the WTO system currently operates, which is one reflecting a range of unprecedented global trade tensions," the 66-page report concluded. The panel recommended the US bring its measures "into conformity with its obligations", but also encouraged the two sides to resolve the overall dispute.

"Time is available for the parties to take stock as proceedings evolve and further consider opportunities for mutually agreed and satisfactory solutions."

The decision could help fuel a Trump decision to leave the 25-year-old WTO or underpin US arguments for reforming it, said Ms Margaret Cekuta, a former USTR official who helped write a crucial report on China's intellectual property abuses that preceded Mr Trump's tariffs.

"It gives the administration ammo to say the WTO is out of date. If they can't rule on intellectual property rights, then what is their position in the broader economy going forward?" said Ms Cekuta, now a principal with Capitol Counsel lobbying firm.

Mr Trump, critical of multilateral institutions, has already quit Unesco and plans to leave the World Health Organisation.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 17, 2020, with the headline 'Trump on tariffs ruling: I'm not big fan of WTO'. Print Edition | Subscribe