China files WTO challenge to Trump’s US$200B tariff plan

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Container boxes are seen at the Yangshan Deep Water Port, part of the Shanghai Free Trade Zone, in Shanghai, China September 24, 2016. REUTERS/Aly Song/File Photo

BEIJING, China (AP) — China announced it filed a World Trade Organization challenge today to President Donald Trump’s latest tariff threat, stepping up its diplomatic efforts to counter US pressure in a spiralling technology dispute.

The Trump administration has criticised the WTO as unable to deal with the problems posed by China, suggesting a challenge there might have little impact in Washington. But it might help Beijing rally support from governments that criticised Trump for going outside the WTO to impose tariffs on Chinese and other imports.

The move is unusually swift, coming less than one week after the US Trade Representative proposed 10 per cent tariffs on a US$200 list of Chinese goods. Those wouldn’t take effect until at least September.

China’s lopsided trade balance means it will run out of US imports for penalty tariffs before Washington does. Beijing is trying to recruit support, so far in vain, from Europe, South Korea and other governments.

“We are unable to fight equally,” said Tu Xingquan, director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

Today’s move “indicates that we value the role of the WTO rules,” said Tu.

Washington imposed 25 per cent tariffs on US$34 billion of Chinese goods in response to complaints Beijing steals or pressures companies to hand over technology. Beijing responded immediately by imposing identical penalties on a similar amount of American imports.
It has criticised the latest tariff threat but has only about US$80 billion of annual imports left for penalties.

As for why Beijing hasn’t retaliated, “there might be some adjustment in China’s approach to countermeasures,” said Tu.

Economists and business groups have suggested Beijing might try to disrupt operations of American companies, especially service industries, in which the United States runs a surplus. But Chinese officials have tried to appeal to American companies as allies.

A Commerce Ministry spokesman said last week Beijing hoped they would lobby Washington to protect their own interests.

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