China Wants $2.4 Billion from the U.S. Over an Old WTO Tariff Dispute

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Amid an enormous trade war between the U.S. and Chinese governments, China’s trying to get $2.4 billion from the United States for its non-compliance with a World Trade Organization (WTO) ruling over the legitimacy of tariffs from the Obama era.

Yes, that’s right: In 2012 China disputed the application of a bunch of tariffs on solar panels, wind turbines, and certain steel and aluminum products, and a WTO appeals court agreed that some of the U.S. tariffs were unfair. From Reuters:

China’s request appears on the agenda of the (Dispute Settlement Body) set for Oct. 28. The United States could challenge the amount of retaliatory sanctions sought, which could send the long-running dispute to arbitration.

The office of U.S. Trade Representative (USTR) Robert Lighthizer has said the WTO ruling recognized that the United States had proved that China used state-owned enterprises to subsidize and distort its economy.

But the ruling also said the United States must accept Chinese prices to measure subsidies, even though USTR viewed those prices as “distorted”.

Without having read the text of the WTO ruling, that ruling seems kinda odd ... despite being in a vein similar to previous WTO rulings against the U.S. It’s well documented that China has for years subsidized the friggin’ heck out of these industries, saturating some of them so much that they caused global overcapacity problems. And accepting Chinese prices to measure subsidies would seem to fly in the face of the fact that China remains a non-market economy.

The lawyers are gonna wrestle this one out, and we’ll keep an eye on it. This case is illustrative, though, of a larger point: The trade policies pushed by the Chinese government were a problem before Donald Trump became president. And although negotiations toward a comprehensive deal continue, and although it’s a good thing that this guy has (however ham-handedly) squared off with China over its unfair trade practices, these problems are almost guaranteed to continue after him.

This is a long game. Whatever deal the USTR is able to reach with his Chinese counterparts needs to be a comprehensive as possible. No settling for soybeans!

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Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

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On Tuesday, the labor movement drove historic wins for pro-worker candidates like Governor-Elect Andy Beshear in Kentucky and new legislative majorities in Virginia. Not only did union members come out to vote in droves, 270 union member candidates were elected to public office last night and counting. This adds to the total of more than 900 union members elected up and down the ballot in last year’s midterms, a product of the Union Member Candidate Program launched by the AFL-CIO just two years ago. The share of union members who won in the 2018 midterms is two-thirds. The program will continue through 2020 and beyond, electing even more union members to public office. 

“Our efforts recruiting, training and supporting labor candidates have led to the passage of pro-worker legislation from coast to coast and everywhere in between,” AFL-CIO President Richard Trumka said.

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