(qlmbusinessnews.com . Thus 6th Feb, 2025) London, UK —
China Challenges US Tariffs, Filing Complaint with WTO Over ‘Discriminatory' Measures
Beijing has formally lodged a complaint with the World Trade Organization (WTO), accusing the United States of imposing “discriminatory and protectionist” tariffs on Chinese products. The move comes just one day after President Donald Trump raised border taxes by 10%, citing China's alleged role in the illicit fentanyl trade as justification.
In its WTO filing, China rejected the US claims, labelling them as “unfounded and false allegations.” The dispute has added fresh uncertainty to the already volatile global trade landscape.
Tensions over Tariffs and Trade Deficit
President Trump, who has long advocated tariffs as a way to encourage domestic production and reduce the trade deficit, has made clear his desire to impose duties on all foreign imports. The latest measures targeting China are part of broader tariff threats, which could extend to other nations, including Canada, Mexico, and European countries.
However, the tariffs have sparked widespread concern about their impact on the economy. Businesses have responded by delaying investments and, in some cases, passing increased costs onto consumers.
In December, US imports hit a record $293.1bn, up 4% from November, according to the Commerce Department. The surge in imports, including toys, mobile phones, and electronics, contributed to the widest trade deficit in nearly two years.
China's Swift Response
China wasted no time in responding to the US tariffs. The country not only filed its WTO complaint but also introduced retaliatory measures, including tariffs on American goods and an anti-monopoly investigation into Google.
There are indications that Apple's App Store policies and fees may also face scrutiny, which caused a dip in the company's shares.
Mark Williams, chief China economist at Capital Economics, noted that while Trump's measures might impact individual firms such as Shein and Temu, the overall Chinese economy is likely to weather the storm. “For the wider Chinese economy, this is definitely manageable,” he said.
Implications for Global Trade
The WTO's procedures allow the US and China 60 days to resolve the dispute through consultations. If unsuccessful, China can request adjudication by a panel of judges. However, the effectiveness of this process remains in doubt.
The WTO's panel for settling trade disputes is currently unable to function fully due to the US's refusal to approve the appointment of new judges. Washington has previously ignored WTO rulings, including one that deemed tariffs on steel and aluminium during Trump's first term unlawful.
In December, China held the largest trade deficit with the US, sending $25.3bn more goods than it imported. The European Union ranked second, while the US maintained a modest $2.3bn trade surplus with the UK.
Overall, the US trade deficit, including services, rose 17% last year to $918.4bn. The December deficit in goods and services reached $98.4bn, the highest since March 2022.
As global trade tensions persist, businesses and policymakers alike brace themselves for continued uncertainty.
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