The World Trade Organization (WTO) faces mounting tensions as its director-general, Ngozi Okonjo-Iweala, urged its 166 members to maintain "cool heads" and continue dialogue amidst escalating tariff disputes. The General Council meeting, which continues on Wednesday, sees Washington raising concerns over China’s non-market economic practices and alleged breaches of WTO rules. Concurrently, China condemns the United States for imposing unilateral and arbitrary tariffs that violate WTO regulations.
Amidst these tensions, Li Chenggang, China’s ambassador to the WTO, warned of global repercussions, stating, "The world faces a series of tariff shocks." Highlighting the root cause of current trade turbulence, Li emphasized that they stem from "US arbitrary tariffs and unilateral measures." In response to US actions, China has imposed retaliatory tariffs targeting American coal and liquefied natural gas. The situation intensifies as the US remains firm on its additional 10% levy on imports and President Trump’s announcement of a 25% tariff on imported cars.
President Trump’s economic policy heavily relies on imposing punitive tariffs against countries with significant trade surpluses with the US. As part of this strategy, Trump signed executive orders implementing new 25% tariffs on steel and aluminum, set to take effect on March 12. However, he temporarily paused these levies against Canada and Mexico for a month.
The WTO is currently upgrading its tariff analysis database, with the new version set to launch on March 4. This update is intended to assist members in navigating the evolving trade landscape. Okonjo-Iweala encourages members to view this period as an "inflection point" for pursuing long-awaited reforms within the organization.
Li Chenggang urged members to reconsider their approach in light of the changing global trade dynamics. He remarked, "We cannot come here to continue doing the same things we've been doing." The Geneva-based trade official echoed Washington's concerns about China's lack of transparency and disregard for WTO oversight. The official pointed out that the WTO's current inability to address China's market-distorting policies, like unfair subsidies, undermines the organization's effectiveness.
China argues that President Trump's sweeping tariffs threaten inflation, market distortions, and could potentially lead to a global recession. In contrast, the US criticizes China's economic practices as detrimental to fair trade. As both nations stand firm on their respective positions, the need for constructive dialogue becomes increasingly critical.
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