The United States has formally challenged China’s implementation of a World Trade Organization (WTO) ruling for the first time, accusing Beijing of continuing to impose “double-reverse†tariffs on U.S. steel exports in violation of WTO rules. The U.S. Trade Representative (USTR) office issued a statement on the same day, highlighting that China had previously indicated it would comply with WTO guidelines, but the U.S. believes the country is still applying these measures unlawfully.
This marks the first instance where the U.S. has taken action against China’s adherence to a WTO decision. According to WTO procedures, a 60-day consultation period will now begin between the two nations. If no resolution is reached, the dispute could be escalated to the WTO’s panel of experts for a final ruling.
Oriented electrical steel, known for its superior magnetic properties, is a critical material used in transformers and large motors. In 2009, China launched anti-dumping and countervailing duty investigations on U.S.-origin oriented electrical steel. It later imposed tariffs ranging from 7.8% to 64.8% on anti-dumping duties and 11.7% to 44.6% on countervailing duties.
The U.S. argued that these measures violated WTO rules and brought the case before the WTO. In 2012, the WTO ruled that China had acted improperly by initiating the “double-reverse†investigation and imposing the duties. As a result, in August of last year, China adjusted the tariffs, reducing the highest anti-dumping rate to 19.9% and the countervailing duty to 3.4%.
However, the U.S. claims that despite this adjustment, China continues to apply “double-reverse†tariffs in a way that still violates WTO rules. The USTR stated that after reviewing China’s changes, it concluded that the measures are still not compliant. U.S. Trade Representative Katherine Tai expressed confidence in the WTO’s previous ruling, stating that China is failing to correct its non-compliant practices.
China, on the other hand, has maintained that there are differing interpretations among WTO members regarding the application of the Anti-Dumping Agreement and the Subsidies and Countervailing Measures Agreement. It has emphasized its commitment to following WTO rules and handling the issue appropriately.
In October of last year, the U.S. Department of Commerce initiated another “double-reverse†investigation into China’s exports of oriented electrical steel. It planned to release preliminary findings on anti-subsidy and anti-dumping measures in December and March, but no official results have been announced yet.
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