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The US responded defiantly on Tuesday to a World Trade Organization report criticizing President Donald Trump's tariffs on China, blasting the organization as "completely inadequate" in holding Beijing accountable.
The WTO panel ruled that the US measures violated longstanding global trade rules because they only applied to products from China, and that Washington had not adequately substantiated its claim that the Chinese products hit with the extra duties had benefited from the allegedly unfair Chinese practices.
Washington has meanwhile slammed China's complaint as "entirely hypocritical", pointing to the "discriminatory duties on over $100 billion in United States exports" imposed in parallel by China.
In 72-page report Tuesday, the panel however said that Washington had "not met its burden of demonstrating that its measures were provisionally justified" under global trade rules.
China's commerce ministry said Beijing supported the multilateral trading system and respected WTO rules and rulings, and hoped Washington would do the same.
Trade Representative Robert Lighthizer insisted the United States must be allowed to "defend itself" against unfair trade practices and maintained the ruling would not affect Phase I of the proposed trade agreement between the U.S. and China. He added that the report has no effect on the phase-one agreement between the nations.
China claimed the tariffs violated the WTO's most-favored treatment provision because the measures failed to provide the same treatment to all WTO members.
The ruling, in theory, would allow China to impose retaliatory tariffs on billions worth of USA goods - if the process is completed. It repeated Chinese criticisms of unilateralism and described the WTO as the "core of the multilateral trading system which forms the cornerstone of multilateral trade".
The US report had cited thousands of pieces of evidence showing China's unfair trade practices, which "have cost US innovators, workers, and businesses billions of dollars every year", his statement said. The Trump administration has claimed the tariffs were necessary to confront China's widespread violations of intellectual property rights and forced technology transfer policies.
Though the use of Section 301 isn't unprecedented, the provision largely fell out of favor in the 1990s after the U.S. agreed to first follow the WTO's dispute settlement process before it triggered any retaliatory trade actions according to Section 301. However, that would put the case into a legal void, 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.
"Then we'll have to do something about the WTO because they've let China get away with murder", he said. There are no winners in this dispute.
The United States could appeal against Tuesday's ruling.