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TWN
Info Service on WTO and Trade Issues (Apr25/07) Geneva, 9 Apr (D. Ravi Kanth) — The United States on 8 April said that a tariff of 104% on Chinese goods entering the American market will go into effect on 9 April, after China flatly refused to remove the 34% retaliatory duty it had announced in response to US President Donald Trump’s reciprocal tariffs of 34% on Chinese goods, according to the White House spokesperson. While insisting that China wants to negotiate a deal, which China had not confirmed, it has been decided that the 50% additional tariff on China will go into effect bringing the overall tariff to 104%, the spokesperson Karoline Leavitt said. She said China’s retaliatory tariffs were a mistake, adding that in response, the administration would impose the total tariff of 104%. President Trump had already imposed a 20% tariff on Chinese goods on grounds that Beijing has failed to stop the flow of alleged illegal supplies of the drug fentanyl to the US. Subsequently, a reciprocal tariff of 34% was announced on Chinese goods starting on 9 April. President Trump will now add an additional tariff of 50% because of China’s retaliation to the reciprocal tariff. Significantly, the White House spokesperson said that President Trump held a meeting with his trade team on 8 April wherein he directed his advisors to “have tailor-made trade deals with each and every country that calls up this administration.” She said President Trump wants his negotiating team to make “unique” deals “based on that country’s markets, based on that country’s exports, the imports here in the United States of America.” While the negotiations with the countries seeking resolution with the US will continue, the baseline tariff of 10% and the reciprocal tariff would take immediate effect, she informed the press. In response to the latest move by the US administration, a spokesperson for China’s commerce ministry warned against President Trump’s move, insisting that Beijing would “resolutely take countermeasures to safeguard its own rights and interests.” “If the US insists on going its own way, China will fight to the end,” the spokesperson said, according to media reports. During a briefing with the US senators on 8 April, the US Trade Representative (USTR), Ambassador Jamieson Greer, said “other countries signaled that they like to find a path forward on reciprocity, China has not said that, and we will see where that goes.” According to Ambassador Greer, “I think we need to work with our closest friends to make sure that we have trading arrangements that work.” “If the Chinese are open, we will see,” the USTR said, adding that “they have not signaled that at all.” It is rather surprising on what basis President Trump is saying that China is interested in reaching a deal with the US, said people familiar with the development. CHINA STANDS FIRM Meanwhile, China on 8 April condemned the threats issued by President Trump, asserting that it will “fight to the end,” as “the US threat to escalate tariffs on China is a mistake on top of a mistake,” in what appears to be a spiraling trade war between the world’s two largest economies, said people familiar with the development. A statement issued by China’s commerce ministry said President Trump’s threat to impose an additional 50% tariff if Beijing does not rescind its retaliatory tariff of 34% on US goods, “once again exposes the blackmailing nature of the US.” “China will never accept this. If the US insists on its own way, China will fight to the end,” said the statement. Earlier, China said that it will not tolerate any “unilateral bullying” by the US. China’s People’s Daily said in an editorial on 6 April that “the sky won’t fall,”, adding that, “Since the US initiated the (first) trade war in 2017 – no matter how the US fights or presses – we have continued to develop and progress, demonstrating resilience – “the more pressure we get, the stronger we become”.” With the deadline for China to remove its retaliatory tariff on US goods having already passed, President Trump has not made any final call yet on imposing the 50% additional tariff on Chinese goods. Instead, he touted in his social media post on Truth Social on 8 April that he “had a great call with the Acting President of South Korea,” adding that they “talked about their tremendous and unsustainable Surplus, Tariffs, Shipbuilding, large scale purchase of US LNG, their joint venture in an Alaska Pipeline, and payment for the big time Military Protection we provide to South Korea.” South Korea’s “top TEAM is on a plane heading to the US, and things are looking good,” President Trump claimed. Without revealing the names of the countries that want to reach a deal with the US following the imposition of his reciprocal tariffs, President Trump said, “We are likewise dealing with many other countries, all of whom want to make a deal with the United States.” “Like with South Korea, we are bringing up other subjects that are not covered by Trade and Tariffs, and getting them negotiated also,” he said, insisting that “ONE STOP SHOPPING is a beautiful and efficient process!!!” Without any apparent evidence, President Trump said that “China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen! GOD BLESS THE USA.” It is, however, moot as to what President Trump will do if China does not call, as China’s firm stand against the reciprocal tariffs could give rise to the emergence of new coalitions to fight against the unilateral tariffs and other measures imposed by President Trump that has created “unpredictability and uncertainty” in global trade, said several people who asked not to be quoted. The White House spokesperson Leavitt said that China wants to make a deal with the US, insisting that the 104% tariffs on China will go into effect on 9 April. To recall, the US has already imposed a baseline tariff of 10% on all countries on 5 April. In addition, the varying levels of reciprocal tariffs on around 60-plus countries announced by President Trump will come into effect on 9 April. The overall level of tariffs unveiled by President Trump against China comes to around 65% (the 20% tariff imposed on Chinese goods because of the alleged illegal supplies of the drug fentanyl plus the 34% reciprocal tariff plus the tariff of 11% imposed by the previous Biden administration). Responding to President Trump’s reciprocal tariff of 34% on all Chinese goods, Beijing chose to hit Washington in equal measure by announcing a 34% tariff on US goods as well as a slew of export restrictions, particularly on exports of critical raw minerals that are crucial for the development of fighter jets and other advanced technology items. China’s 34% tariff on American goods and the export restrictions will come into effect on 10 April. Responding to China’s announcement of the 34% retaliatory tariff on US goods, President Trump on 7 April said he will impose another 50% tariff if China does not remove its retaliatory tariff by 8 April. CHINA’S WTO COMPLAINT Meanwhile, a formal request for consultations by China concerning the reciprocal tariffs imposed by President Trump on 2 April was circulated to WTO members on 8 April. According to China’s communication (WT/DS638/1) to the Dispute Settlement Body, China has requested consultations with the US under Articles 1 and 4 of the World Trade Organization’s Dispute Settlement Understanding (DSU) “with respect to the United States’ so-called “reciprocal tariff” measures that impose additional duties on products from all its trading partners, including China.” China said a universal additional ad valorem rate of duty of 10%, effective on 5 April 2025, is imposed on products from all United States’ trading partners. Subsequently, it said, for the United States’ trading partners as enumerated in Annex 1 to the Executive Order (issued on 2 April), a country-specific additional tariff, effective on 9 April 2025, would apply and the duty rate shall increase from 10% to the rate as set forth in the above mentioned Annex. “As a consequence,” China said, “all products originating in China are subject to a 10% additional tariff, effective on 5 April 2025, and a 34% additional tariff, effective on 9 April 2025.” According to China, “the additional tariffs are imposed in addition to any other duties or charges applicable to the imported products, including the United States’ bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994, and the country-specific tariffs in particular, accord differential treatment to products originating from different WTO Members.” China argued that “the measures at issue, adopted by the United States unilaterally on the alleged basis of “reciprocity” and “trade balance”, are a clear breach of its own WTO obligations and commitments, and seriously undermine the rules-based multilateral trading system, and are discriminatory and protectionist in nature.” China said “the legal documents through which the United States imposes and administers the measures at issue include, inter alia: * the International Emergency Economic Powers Act of 1977, 50 U.S.C 1701 et seq; * the National Emergencies Act, 50 U.S.C. 1601 et seq; * Section 604 of the Trade Act of 1974, 19 U.S.C. 2483; * Executive Order of 2 April 2025: Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits, effective on 5 April 2025; * Fact Sheet: President Donald J. Trump Declares National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security.” China said that “the measures at issue appear to be inconsistent with the United States’ obligations under the following provisions of the GATT 1994, the Customs Valuation Agreement, and the SCM Agreement, including: * Article I:1 of the GATT 1994, because the measures at issue fail to extend immediately and unconditionally to products originating in 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. * Article X:3(a) of the GATT 1994, because the United States does not administer the measures at issue in a uniform, impartial, and reasonable manner. * Articles 1.1 and 8 of the Customs Valuation Agreement, and the relevant interpretative Notes in Annex I thereto, as well as paragraphs 1 and 2 of the General Introductory Commentary of the Customs Valuation Agreement, and Articles VII:1, VII:2(a), (b) and ( c) of the GATT 1994, because the United States, by excluding the value of the “US content” of the imported products from the application of the additional tariffs, fails to use the transaction value, that is the price actually paid or payable for the goods, as the basis for customs value, and applies unjustified adjustment or valuation methods for customs purposes. * Articles 3.1 and 3.2 of the SCM Agreement, because the United States, by excluding the value of the “US content” of the imported products from the application of the additional tariffs, provides subsidies, within the meaning of Article 1 of the SCM Agreement, contingent in law or in fact, upon export performance and the use of domestic over imported goods. The available evidences are the documents listed in the Measures at Issue above.” As a first step, the US will have to address the issues raised by China within a period of 30 days. If the two sides fail to reach an amicable agreement within 60 days, then China can request the establishment of a dispute panel to rule on the US reciprocal tariff measures. GC CHAIR TO HOLD CONSULTATIONS In a related development, the chair of the WTO’s General Council (GC), Ambassador Saqer Abdullah Almoqbel of Saudi Arabia, in a communication to heads of delegations on 8 April, informed that “he intends to hold informal consultations with interested delegations on the current economic situation and how this may impact the multilateral trading system, with a view to exploring how WTO members could engage on these latest developments,” a WTO spokesperson said. “The initiative is in response to several delegations approaching him about the latest developments in global trade and how this may impact work at the WTO,” the GC chair said. The GC chair said he intends to hold consultations over the course of next week. Meanwhile, the WTO’s Director-General, Ms Ngozi Okonjo-Iweala, at a Town Hall meeting on 2 April announced a severe squeeze in appointments, travel expenses for officials, and even new trainees, on grounds of severe budgetary cuts. Last year, the DG’s travel expenditure is understood to have been estimated at around CHF 1 million, said a person who asked not to be quoted. The DG is understood to be traveling to Tokyo soon and later this month for the spring meetings of the IMF and World Bank in Washington DC, the person said. EU TAPS CHINA In a related development, the European Union on 8 April called on China to work out a “negotiated resolution” to bring about “stability and predictability” to the global trading system that has now been almost “broken” by the alleged unilateral “reciprocal tariffs” announced by President Trump on 2 April. According to a news report in the Financial Times on 8 April, it appears that the EU officials want to ensure cooperation with Beijing to contain any escalation and limit the damage to the European economy. The EU has announced that it would impose retaliatory duties on American goods in response to President Trump’s imposition of a 25% tariff on cars and auto parts, though the truncated list announced by Brussels removed bourbon whiskey following a threat from President Trump, said people familiar with the development. It remains to be seen how the situation between the EU and China, with the huge size of their respective markets and the large volume of goods being traded between them, will unfold in the coming days, said people familiar with the development. +
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