International Relations Multilateral Prelims cum Mains

China challenges U.S. tariff threat at WTO

The News

  • China has filed a World Trade Organization (WTO) challenge against U.S. President’s latest tariff threat, stepping up its diplomatic efforts to counter U.S. pressure in a spiraling technology dispute.
  • The Trump administration has criticised the WTO as it was unable to deal with the problems posed by China.



  • The U.S. imposed 25% tariffs on $34 billion of Chinese goods in response to complaints that China pressurizes the companies to hand over technology.
  • Chins responded immediately by imposing identical penalties on a similar amount of American imports.
  • The recent move of China is unusually swift, coming less than one week after the U.S. proposed 10% tariffs on a $200 billion list of Chinese goods.
  • China has criticised the latest tariff threat but has only about $80 billion of annual imports left for penalties.
  • Beijing has stepped up diplomatic efforts to recruit support from Europe, South Korea and other trading partners but so far without success.


Why U.S. is imposing tariffs?

  • China introduced its strategic industrial promotion policy- Made in China 2025.The unfair intellectual property and technology transfer practices under it are said to cause harm to the US economy.
  • They allegedly coerce US companies into transferring technology and intellectual property to domestic Chinese enterprises.
  • The proposed list of products was thus based on an extensive inter-agency economic analysis of the harm.
  • The measure thus targets products that benefit from China’s industrial plans while minimizing the impact on the US economy.
  • Also, the issue of US’s huge trade deficit with China is highlighted as a reason.


U.S- China Trade

  • The U.S. trade deficit with China was $375 billion in 2017.
  • The trade deficit exists because U.S. exports to China were only $130 billion while imports from China were $506 billion.
  • The United States imports consumer electronics, clothing, and machinery from China.
  • A lot of the imports are from U.S. manufacturers that send raw materials to China for low-cost assembly.


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