The Trump administration refuses to abide by a ruling of the World Trade Organization (WTO) the United States pay China $2.4 billion in retaliatory sanctions for its non-compliance with a WTO ruling in the case of a tariff filed during the term of former president Barack Obama.
The WTO's Dispute Settlement Body (DSB) gave China permission to seek compensatory sanctions back in August. The WTO said the Trump administration has failed to comply with the DSB recommendations and rulings within the specified period. No agreement on any compensation to China been reached.
China's request for retaliatory sanction will be taken up by the DSB on Oct. 28. The Trump administration can challenge the number of retaliatory sanctions sought by China. This challenge will send the seven-year-long dispute to arbitration.
The Trump administration has adamantly refused to follow the WTO order. It says it doesn't view the WTO findings as valid. It also alleges WTO judges applied "the wrong legal interpretation in this dispute." The White House also claims China continues to be the "serial offender" of the WTO's subsidies agreement.
The Trump administration in September, however, quickly accepted a WTO ruling in the U.S.' favor in a case over illegal subsidies granted plane maker Airbus by the European Union. It plans to impose heavy retaliatory tariffs on the EU as a result of its WTO win.
In its request to the WTO for retaliatory sanctions, China said that in response to the United States' continued non-compliance with the DSB's recommendations and rulings, it "requests authorization from the DSB to suspend concessions and related obligations at an annual amount of $2.4 billion."
China went lodged a case against the U.S. at the WTO in 2012. It challenged U.S. anti-subsidy tariffs (also called countervailing duties) on Chinese exports such as solar panels, wind towers, steel cylinders, and aluminum extrusions. These exports were worth $7.3 billion at the time, according to China.
The U.S. imposed the countervailing duties following 17 investigations between 2007 and 2012.
China's demand for retaliatory sanctions adds a new wrinkle to ongoing trade negotiation talks with the Trump administration. As is his usual practice, Trump again said things are doing well in the negotiations.
On Monday, he alleged work on a new trade agreement was coming along "great." On Oct. 18, Trump claimed a trade deal will be signed by the time the Asia-Pacific Economic Cooperation meetings take place in Chile on Nov. 16 and 17.
