A World Trade Organization panel ruled Tuesday that Trump administration tariffs on $200bn worth of Chinese goods are illegal, vindicating Beijing, even if the United States has all but incapacitated the WTO's ability to hand down a final, binding verdict.
The decision marks the first time that the Geneva-based trade body has ruled against a series of high-profile tariffs that President Donald Trump's government has imposed on a number of countries - allies and rivals alike. Trump has repeatedly claimed that the WTO treats the US unfairly.
In its decision, the WTO's dispute settlement body ruled against the US government's argument that China has wrongly engaged in practices harmful to US interests on issues including intellectual property theft and technology transfer.
The ruling, in theory, would allow China to impose retaliatory tariffs on billions' worth of US goods. But it is unlikely to have much practical impact, at least in the short term, because the US can appeal the decision and the WTO's appeals court is currently no longer functioning - largely because of Washington's refusal to accept new members for it.
The appeals court issues final rulings in trade cases and stopped functioning last year when the terms of two of its last three judges expired with no replacements. That means the US can appeal the decision "into the void,'' said Timothy Keeler, a lawyer at Mayer Brown and former chief of staff for the US Trade Representative.
"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," said US trade representative Robert Lighthizer in a statement. He said the US had presented "extensive evidence" of China's intellectual property theft and the WTO has offered no fixes for it.
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