China launches lawsuit against trade tariffs, US threatens to disable WTO’s top court

Beijing has launched a lawsuit against Washington’s trade tariffs at the World Trade Organization’s top court as the US threatens to block judges from addressing the case.    

A WTO panel addressing the complaint was held on Monday. China’s diplomatic trade representative denounced the tariffs as Washington’s attempts to undermine the international trade system.

“This is a blatant breach of the United States’ obligations under the WTO agreements and is posing a systemic challenge to the multilateral trading system,” China’s representative said.

China had originally filed the complaint last April. WTO complaints are initially processed as a “request for consultations."

If consultations fail to resolve the disputes after 60 days, the complainant may request adjudication by a WTO panel.

Washington has so far threatened to block the WTO from being able to address the complaint by vetoing against any new appointment of the body's Appellate Body judges.

Only three of the WTO's seven judges remain appointed, two of which will step down in December. WTO policy requires three judges to hear appeals.

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Defending Washington's measures, US representative at Monday’s panel accused China of using the WTO as a shield for trade-distorting policies.

“It is China, and certainly not the US, that is threatening the overall viability of the WTO system,” said the US official.

The trade dispute originally began after the US imposed additional tariffs on approximately $234 billion Chinese imports starting since July 2018.

The US blames China of violating its intellectual property. The tariffs also seek to curb what US President Donald Trump has described as negative US-China trade imbalance.

China has retaliated by imposing tariffs on $110 billion of US goods as discussions have so far failed to bring an end to the ongoing trade war.

A Chinese delegation of 30 officials led by Chinese Vice Premier Liu He is set to arrive in Washington this week for high-level trade talks. The Chinese premier will also meet Trump.

Speaking on Monday, US Treasury Secretary Steven Mnuchin said that he believes the talks will make good progress.

Last week, however, US Commerce Secretary Wilbur Ross expressed pessimism in future negotiations, saying that the two countries were still far away from resolving trade disputes.

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Beijing and Washington have a month remaining in a truce declared in December before US tariffs on hundreds of billions in Chinese exports are due to increase sharply -- a prospect economists say could help knock the wind out of an already-faltering global economy. The US has set a March 2 deadline to implement the changes.

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