US, China have lots of 'ammunition' and trade spat could escalate, says WTO chief

Roberto Azevedo (above) said the WTO has focused on trying to increase dialogue between the two countries.
Roberto Azevedo (above) said the WTO has focused on trying to increase dialogue between the two countries.PHOTO: REUTERS

RIO DE JANEIRO (REUTERS) - The trade dispute between the United States and China could well expand into other areas given the significant "ammunition" the two countries have, the director-general of the World Trade Organisation (WTO) said on Wednesday (Sept 19).

Speaking at an event in Rio de Janeiro against the backdrop of growing trade tensions between Beijing and Washington, Roberto Azevedo said the WTO has focused on trying to increase dialogue between the two countries.

"I'm very concerned," he said at the event.

"To be honest, I don't think it's over. They have lots of ammunition and it can expand to other areas beyond just tariffs... and trade."

He did not elaborate.

On Tuesday, in the latest sign of deteriorating commercial relations between the world's two largest economies, Beijing added US$60 billion (S$80 billion) worth of US products to its import tariff list in retaliation for US President Donald Trump's planned levies on US$200 billion worth of Chinese goods.

Trump has long railed against the WTO, and his government has eroded its power by blocking appointments to its appeals chamber as existing trade judges' terms end.

 

If the United States manages to paralyse the WTO's dispute system, it would end 23 years of WTO enforcement, the keystone of international efforts to prevent trade protectionism.

Azevedo said it would be possible to have a global trade dispute resolution body without the United States, but it is unclear whether Washington would be in favour of such an organization.