China seeks sanctions against US over dumping

China told the World Trade Organization yesterday that it wanted to impose US$7 billion a year in sanctions on the United States in retaliation for Washington’s non-compliance with a ruling in a dispute over US dumping duties.

The request for authorization from the WTO to introduce the sanctions is likely to lead to years of legal wrangling over the case for the penalty and the amount.

China initiated the dispute in 2013, complaining about US dumping duties on several industries, including machinery and electronics, light industry, metals and minerals, with an annual export value of up to US$8.4 billion at the time.

China’s request for authorization, published by the WTO, said the latest available data showed it had suffered US$7.043 billion in damages annually, and therefore it requested permission to raise trade barriers on US goods to the same amount, as allowed under WTO rules.

China won a WTO ruling in the dispute in 2016, and that judgment was confirmed by an appeal last year.

The case concerned the US Commerce Department’s way of calculating the amount of “dumping” — exports that are priced to undercut American-made goods on the US market.

The US calculation method, known as “zeroing,” tended to increase the level of US anti-dumping duties on foreign producers and was repeatedly ruled to be illegal in a series of trade disputes brought to the WTO.

The string of US defeats fueled US President Donald Trump’s campaign to reform the WTO.

Trump said last month that the United States could withdraw from the WTO if “they don’t shape up.”

China told the WTO last month that the deadline for the US to comply with the ruling expired on August 22.

The WTO published an agenda yesterday for a meeting of its dispute settlement body on September 21, showing China planned to take the legal step of asking for authorization for sanctions.