China Asks WTO For $2.4B In Sanctions Against US

US President Donald Trump has expressed cautious optimism recently about the direction of trade talks with Beijing

US President Donald Trump has expressed cautious optimism recently about the direction of trade talks with Beijing

China seeks to implement $2.4 billion worth of retaliatory sanctions against the USA, stating that their trade partner hadn't fully complied with a WTO ruling dating back to the previous American administration, which required the cancellation of tariffs on solar panels, wind towers, steel cylinders, and aluminium extrusions.

WTO appeals judges said in July that the United States did not fully comply with a WTO ruling and could face Chinese sanctions if it does not remove certain tariffs that break the watchdog's rules.

China took the case to the WTO's Dispute Settlement Body (DSB), arguing the USA counter-measures breached worldwide trade rules, ultimately winning a partial victory. The matter would be referred to a WTO arbitrator if the US objects to the amount China proposes.

The US delegation at the WTO said China remains the "serial offender" of the WTO's subsidies agreement but US officials in Geneva and Washington had no further comment on the case on Monday.

Washington has challenged the validity of the WTO ruling and could dispute the $2.4 billion in retaliatory sanctions, sending the matter to arbitration.

Other countries do not want to bring the U.S.to the WTO on trade unless they are absolutely sure that the US has violated worldwide trade rules. China had taken the U.S.to court in 2012 over American anti-subsidy tariffs on Chinese goods such as solar panels and wind towers.

The duties were imposed as the result of 17 investigations begun by the U.S. Department of Commerce between 2007 and 2012.

Washington criticized that decision, which it said recognizes that China uses state-owned enterprises to subsidize and distort its economy but contends the US must use "distorted Chinese prices" to measure subsidies.

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

Trump last week said he hopes that the first phase of a trade deal announced earlier in October will be signed by the middle of next month.

An outgrowth of General Agreement on Tariffs and Trade, known as GATT, the WTO was founded in 1995 to supervise trade agreements.

Trump has even threatened past year to pull out of the WTO and has argued that the body has ruled too often against the U.S.

The move comes as the world's two largest economies continue to seek a deal to resolve a trade war that has seen billions of dollars in tit-for-tat tariffs imposed by both sides.