On Tuesday, the WTO found that the US “violated international trade rules with its use of 1970s trade laws to unilaterally launch what BBG described as a commercial conflict, i.e. the ongoing trade war.
However, the ruling news did little to spook investors, as the US is given 60 days to file an appeal. The news prompted only a slight retreat in the US equity markets as well as drop in the value of the Yuan. Also, thanks to changes to the appeal process orchestrated by the US years ago, any type of appeal would stymie further action. Beijing, to no ones surprise, accepted the decision.
President Trump blamed his predecessors (specifically the Clinton and Obama administrations) for allowing China to join the WTO, even advocating for their admission, and then remaining mute when Beijing stole American technology, utilized illegal domestic export subsidies (collapsing American manufacturing), and keeping their economy air-tight, refusing to allow foreign companies to operate within their borders.
The use of tariffs by the US against China had previously been authorized under Section 301 of the Trade Act of 1974, which allows the US president to levy tariffs and other import restrictions when ‘unfair’ trade practices inversely impact the US economy.
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