Trump’s China Tariffs now Under WTO Investigation, Appellate Body Successor Issue Unresolved

WTO office
The World Trade Organization headquarters in Geneva, Switzerland, July 26, 2018. (Photo: REUTERS/Denis Balibouse/File Photo)

The World Trade Organization (WTO) has started investigating U.S. President Donald Trump's tariffs on Chinese goods, an official familiar with the probe has revealed. The news comes as the organization's Appellate Body still lacks judges to rule the case.

An official who has knowledge about the investigation but asked for anonymity confirmed that the WTO is now looking into U.S. tariffs on around $250 billion Chinese goods, Bloomberg reported. The probe began on Monday, despite the Appellate Body lacking in court rulers to oversee cases brought to the organization.

Former Democratic congressman and one-time head of the WTO's Appellate Body, James Bacchus, said in an email, "I believe these U.S. tariffs are inconsistent with WTO obligations, but it will be left to my successors on the WTO appellate body to decide."

Bacchus' comments came after China sought the assistance of the WTO in blocking U.S. tariffs laid out on Chinese imports. A deal was not reached during U.S. President Donald Trump and Chinese President Xi Jinping's December summit. Trump has since threatened to raise tariffs by 25 percent if a deal is not settled by March.

A transcript obtained by Reuters revealed China's representative calling the tariffs a "blatant breach" of supposed obligations the WTO has placed for trading countries. The representative added that the problem could pose a threat to further issues in global trading processes.

In the middle of last year, the United States imposed 25 percent of added tariffs on around $34 billion imports from China. By late September, an additional 10 percent in tariffs was laid out on around $200 billion Chinese goods. In response, China also placed tariffs on U.S. goods. This resulted in a tariff truce that will end in about a month.

Washington has moved against the WTO Appellate Body over the past months, stating that court judges have overstepped the authority given to them by the organization. So far, there are only three judges left on the panel.

According to WTO rules, three judges are required before a panel hearing begins. While Washington stands behind its claims, China has been joined by 70 other WTO members as they call for the organizing body to stop the U.S. from halting the appointment of judges who will hear further cases.

During the WTO meeting on Monday, Brazil's representative expressed his concerns over the potential "shutdown" of the Appellate Body. He said time is running out and successors need to be appointed before the organization's trade dispute system falls into chaos.

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