TWN Info Service on WTO and Trade Issues (Feb25/02)
7 February 2025
Third World Network

WTO: China initiates dispute over Trump tariff measures on Chinese goods

Penang, 6 Feb (Kanaga Raja) — China has formally initiated a dispute at the World Trade Organization over new tariff measures imposed by United States President Donald Trump on goods originating in China.

As an initial step, China has requested consultations with the US. The request was circulated to WTO members on 5 February.

If consultations fail to settle the dispute within 60 days, or if during the 60 days, the consulting parties jointly consider that the consultations have failed, the complaining party may request the establishment of a panel.

In its communication (WT/DS633/1) to the WTO’s Dispute Settlement Body (DSB), China said on 1 February 2025, the United States issued a fact sheet and Executive Order implementing a 10% additional tariff on goods originating in China.

It said the 10% additional tariff measures are imposed under section 1702(a)(1)(B) of International Emergency Economic Powers Act (IEEPA), as part of an alleged attempt to address the “national emergency” with respect to alleged influx of synthetic opioids into the United States.

China said as a consequence, all products of China, as defined by the Federal Register notice, shall be subject to an additional 10% ad valorem rate of duty, effective on 4 February 2025.

According to the communication from China, the measures at issue, including the 10% additional tariffs, as well as the measures with respect to the availability of drawback and duty-free de minimis treatment, as provided in Section 2(f) and 2(g) of the Executive Order, respectively, which are imposed on the basis of “unfounded and false allegations concerning China,” apply only to all products of Chinese origin.

Furthermore, the 10% additional tariffs imposed are in excess of the United States’ bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994, it said.

The measures at issue not only violate WTO rules, but are discriminatory and protectionist in nature, said China.

According to the Chinese communication to the DSB, the measures at issue include, inter alia:

* Section 1702(a)(1)(B) of the International Emergency Economic Powers Act;

* Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China;

* Executive Order dated 1 February 2025: Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China;

* Federal Register notice containing the modifications to the Harmonized Tariff Schedule of the United States, as described in section 2(d) of the Executive Order, effective on 4 February 2025.

According to China, the measures at issue appear to be inconsistent with the United States’ obligations under the following provisions of the GATT 1994, including:

* Article I:1 of the GATT 1994, because the measures at issue fail to extend immediately and unconditionally to China an “advantage, favour, privilege or immunity” granted by the United States “[w]ith respect to customs duties and charges of any kind imposed on or in connection with” the importation of products originating in the territory of other Members.

* Article II:1(a) and (b) of the GATT 1994, because the United States imposes additional tariffs on all imported products originating in China as identified in measures above that are in excess of United States’ bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994, and therefore fails to accord to the products originating in China and imported into the United States treatment no less favourable than that provided for in the United States’ Schedule of Concessions and Commitments annexed to the GATT 1994.

In addition, and as a consequence of the foregoing, the measures at issue appear to nullify or impair the benefits accruing to China, directly or indirectly, under the cited agreements, said the Chinese communication.

China reserves the right to raise additional measures and claims regarding the matters identified herein during the course of consultations and in any future request for the establishment of a panel, it added.