On 05 February 2025, the World Trade Organization (WTO) informed that the People’s Republic of China had requested it to dispute consultations with the United States of America in regard to new tariff measures applied by the US on goods originating in China. The request was circulated to WTO members on the day.
China claims that the 10% additional ad valorem duties applied on all goods originating in China, as well as measures with respect to the availability of drawback and duty-free de minimis treatment, which apply to all products of Chinese origin, are inconsistent with US Most-Favoured-Nation (MFN) obligations under Article I:1 of the General Agreement on Tariffs and Trade (GATT) 1994 (GATT 1994) and US tariff obligations under Article II:1(a) of GATT 1994.
What is a request for Consultations?
The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
UNITED STATES – ADDITIONAL TARIFF MEASURES ON GOODS FROM CHINA. REQUEST FOR CONSULTATIONS BY CHINA
The following communication dated 04 February 2025, from the delegation of China to the delegation of the US, is circulated to the Dispute Settlement Body in accordance with Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).
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1. My authorities have instructed me to request consultations with the Government of the US pursuant to Articles 1 and 4 of the DSU and Article XXIII of GATT 1994 with respect to the US’ tariffs measures on goods originating in China.
I. MEASURES AT ISSUE
2. On 01 February 2025, the US issued the fact sheet and Executive Order implementing a 10% additional tariff on goods originating in China. The 10% additional tariff measures are imposed under section 1702(a)(1)(B) of the International Emergency Economic Powers Act (IEEPA) as part of an alleged attempt to address the “national emergency” with respect to the alleged influx of synthetic opioids into the US. As a consequence, all products of China, as defined by the Federal Register notice4, shall be subject to an additional 10% ad valorem rate of duty, effective on 04 February 2025.
3. The measures at issue, including the 10% additional tariffs, as well as the measures with respect to the availability of drawback and duty-free de minimis treatment, as provided in Section 2(f) and 2(g) of the Executive Order, respectively, which are imposed on the basis of unfounded and false allegations concerning China, apply only to all products of Chinese origin.
Furthermore, the 10% additional tariffs imposed are in excess of the US’s bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994. The measures at issue not only violate WTO rules but are discriminatory and protectionist in nature.
4. The measures at issue include, inter alia:
- Section 1702(a)(1)(B) of the International Emergency Economic Powers Act;
- Fact Sheet: President Trump Imposes Tariffs on Imports from Canada, Mexico and China;
- Executive Order dated on 01 February 2025: Imposing Duties to Address the Synthetic Opioid Supply Chain in China;
- Federal Register notice containing the modifications to the Harmonized Tariff Schedule of the US, as described in section 2(d) of the Executive Order, effective on 04 February 2025.
5. The measures at issue also include any amendments, supplements, or extensions to the measures specified above, as well as any closely connected, subsequent, replacement or implementing measures.
II. LEGAL BASIS OF THE COMPLAINT
6. The measures at issue appear to be inconsistent with the US’s obligations under the following provisions of the GATT 1994, including:
- Article I:1 of the GATT 1994, because the measures at issue fail to extend immediately and unconditionally to China an “advantage, favour, privilege or immunity” granted by the US “[w]ith respect to customs duties and charges of any kind imposed on or in connection with” the importation of products originating in the territory of other Members.
- Article II:1(a) and (b) of the GATT 1994, because the US imposes additional tariffs on all imported products originating in China as identified in measures above that are in excess of United States bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994, and therefore fails to accord to the products originating in China and imported into the US, treatment no less favourable than that provided for in the US’s Schedule of Concessions and Commitments annexed to the GATT 1994.
7. In addition, and as a consequence of the foregoing, the measures at issue appear to nullify or impair benefits accruing to China, directly or indirectly, under the cited agreements.
8. China reserves the right to raise additional measures and claims regarding the matters identified herein during the course of consultations and in any future request for the establishment of a panel.
9. China looks forward to receiving the reply of the US to this request and to setting a mutually convenient date for consultations.
