China Trade War Update: China Wins WTO Anti-Dumping Case Against US, Can Impose $3.5 Billion In Sanctions

The World Trade Organization Friday gave China permission to impose more than $3.5 billion in sanctions against the United States in a case stretching back nearly six years and amid ongoing negotiations over a comprehensive trade agreement.

The damages are the third highest in WTO history but only half of what Beijing had sought.

“The arbitrator determined that the level of nullification or impairment was $3.579 billion,” the WTO decision read. “The arbitrator concluded that … China may request authorization from the [dispute settlement body] to suspend concessions or other obligations at a level not exceeding $3.579 billion annually.”

China brought its complaint in 2013, claiming U.S. methods for determining anti-dumping duties on Chinese products were used to punish Beijing. The U.S. had accused China of pricing certain items lower in the U.S. than what the items cost at home and that production costs actually exceeded those prices. The WTO’s initial ruling in 2016 found the U.S. was remiss in the way it determined dumping margins, rejecting its “zeroing” methodology.

Friday’s decision is the latest development in a wide-ranging trade war that has seen both countries impose billions of dollars in tariffs on each other’s goods. Negotiations on a comprehensive trade agreement are underway, and President Trump announced a phase 1 deal last month although details of that pact still are being worked out.

Plans for Trump and Chinese President Xi Jinping to sign the phase 1 agreement at the Nov. 16-17 Asia-Pacific Economic Cooperation summit in Chile were thrown into disarray this week when Chilean President Sebastian Pinera canceled the gathering amid civil unrest that has produced riots, arson and massive protests. The White House has said it is working out details for an alternative site. Trump tweeted Thursday a new location would be announced soon.