US China tariffs violated trade rules\, WTO says

US China tariffs 'inconsistent' with trade rules says WTO

  • 15 September 2020
A port scene Image copyright Getty Images

The World Trade Organization has ruled that tariffs the US imposed on Chinese goods in 2018, triggering a trade war, were "inconsistent" with international trade rules.

The WTO said the US did not provide evidence that its claims of China's unfair technology theft and state aid justified the border taxes.

Chinese officials welcomed the ruling.

But the US said it showed that the WTO was "completely inadequate" to the task of confronting China.

Ambassador Robert Lighthizer, America's top trade negotiator, said the US "must be allowed to defend itself against unfair trade practices".

"This panel report confirms what the Trump Administration has been saying for four years: The WTO is completely inadequate to stop China's harmful technology practices," he said.

"Although the panel did not dispute the extensive evidence submitted by the US of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct."

US-China trade war

China brought the case to the WTO in 2018, as the Trump administration started preparing the first rounds of tariffs on what would eventually become more than $300bn worth of products. The complaint challenged tariffs enacted in June and September of 2018 on goods estimated at more than $200bn in annual trade.

The US said the duties were a response to China's state-sanctioned technology theft, subsidies and other "unfair practices" and allowed under 1970s-era trade rules.

But China said the taxes violated trade regulations because they were higher than US commitments and targeted only one country.

A panel of WTO experts agreed with those claims. It added that the US had not proved its case that the tariffs were justified on moral grounds because it did not show how the products affected by the duties had benefited from the unfair practices.

"The panel found, accordingly, that the US had not met its burden of demonstrating that the measures are provisionally justified," it said.

'Unprecedented global trade tensions'

The panel added that it had only looked into the US measures and not China's retaliation, which Washington has not challenged at the WTO.

Noting "unprecedented global trade tensions", the three-person panel encouraged the two sides to work to resolve the overall dispute.

In a statement on Tuesday, China's Commerce Ministry said it hoped the US would respect the rulings of the World Trade Organisation (WTO) and take practical action to maintain the multilateral trading system.

The Trump administration, which has repeatedly criticised the WTO, may appeal the decision.

But the case could then enter a legal paralysis because Washington has blocked the appointment of judges to the appellate body, preventing it from convening the minimum number required to hear cases.

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US China tariffs violated trade rules\, WTO says

Renault in talks with FIA over Alonso 2020 F1 test
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Renault in talks with FIA over Alonso 2020 F1 test

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Renault in talks with FIA over Alonso 2020 F1 test
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Renault is in talks with the FIA to see if it can get permission to run Fernando Alonso in the post-season Abu Dhabi young driver test, Motorsport.com has learned.

The French car manufacturer's increased competitiveness this year has led to growing interest from Alonso in the team's progress, and a belief that his return next year could deliver more than originally hoped.

In an exclusive interview with Motorsport.com, Renault team principal Cyril Abiteboul said that Alonso's hunger had ramped up the team's desire to get him out in its current car.

However, an FP1 outing has been ruled out.

"Initially it [the approach] was, I drive when I drive," said Abiteboul about Alonso. "But now I get the feeling that he is really keen to get to have a go, even in the current car. So we are looking into the opportunity to do that, but being very sensible.

"So I mean, I'm not talking about any FP1 because frankly he doesn't need that: he doesn't need the exposure of FP1. And we need clearly the set up opportunity.

"But we'd like to see [him in the car] because I can feel that he has hunger for it."

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The reluctance to use an FP1 for Alonso leaves Renault with very limited opportunity to try the current car however.

That is because Formula 1's testing regulations were changed for this year in the wake of the coronavirus pandemic.

Previously, the post-season test at Abu Dhabi had been run over three days and used as a combination of young driver running and tyre testing for the following season.

However, with Pirelli's rubber virtually unchanged for next year, teams agreed that the Yas Marina running would be cut back to a single day and was supposed to be for young drivers.

The regulations state that teams can run two cars for the day, and a clause states that drivers eligible for the test: "unless otherwise approved by the FIA, not have competed in more than two F1 World Championship races during their career."

It means that if Renault wants to get the vastly experienced Alonso on board for the test, it will have to get permission from the governing body either to let Alonso in, or change the format of the test.

Asked if the post-season Abu Dhabi test would be the best chance, Abiteboul said: "Yeah, absolutely. We need to see if it can happen based on the testing criteria. So we are talking with the FIA about that."

With so many drivers swapping teams next year, it is not impossible that Renault may not be alone in trying to ease the restrictions and get some mileage with their 2021 drivers in Abu Dhabi.

Alonso had been clear when he signed for Renault that his only focus was on 2022, when a new era of rules come in. However, Abiteboul says that the Spaniard's mindset had changed with the team now battling for podiums.

"At the start, it was much more about the future," he said. "It was let's go very hard on 2022 and forget about 2021 and write off 2021.

"But as he sees that we are starting to have interesting battles on track, Fernando, he wants to feed the blood: in a positive way. He wants to see that there is something that he can grasp."

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Series Formula 1
Drivers Fernando Alonso Shop Now
Teams Renault F1 Team
Author Jonathan Noble