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With higher tariffs on $60 billion in its exports to the United States and staring down the barrel of tariffs on another $200 billion, China requested the establishment of a WTO dispute settlement panel. Specifically, China sought for a panel to review whether U.S. tariffs – imposed unilaterally and without WTO authorization – violated the United States’ basic obligations to provide most favored nation treatment to China according to the U.S. schedule of tariff commitments in the WTO.
The dispute was triggered by the issuance of a March 2018 report describing the findings of an investigation by the Office of the U.S. Trade Representative under Section 301 of the Trade Act of 1974 into China’s unfair acquisition of U.S. intellectual property and technologies. In its first line of defense, the United States contends that most of the practices it reviewed as part of this investigation are not covered by existing WTO disciplines and therefore the measures it took (the tariff increases on imported goods from China) are “fundamentally not about WTO rights and obligations.”