China Disputing Washer, Solar Panel Tariffs at WTO
China has asked for consultations under World Trade Organization rules to discuss safeguard tariffs the United States is levying against washing machines and solar panels. The request, filed at the WTO on Feb. 6, is the first step in a dispute process on whether the tariffs violate international trade law. "We believe the measures taken by the United States are not consistent with its obligations," China wrote in its requests.
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The washer tariffs are 20 percent on the first 1.2 million machines and 50 percent for those over the quota, ramping down to 16 percent and 40 percent in year three. The solar panel tariffs are 30 percent in the first year, and decline by 5 percentage points each year until reaching 15 percent in the fourth year (see 1801230052). They apply under Section 201 of the 1974 Trade Act, which is designed to safeguard domestic industry.
China's request suggested the two parties could meet Feb. 9 or Feb. 12. If there is no settlement by April 7, China can request that WTO's Dispute Settlement Body establish a panel to hear the case. USTR and the WTO didn't comment.
The safeguard duties come on top of antidumping and countervailing duty orders on large residential washers from South Korea and Mexico. In announcing the safeguard tariffs, (see 1801230052), U.S. Trade Representative Robert Lighthizer said that the 2013 case on South Korean washers failed to curb the country's unfair trade practices in selling washing machines, because LG and Samsung shifted production to China. Last year, he said, Commerce issued an antidumping order on washers from China, and production shifted to Thailand and Vietnam.
In a separate WTO case involving those AD/CV duties on South Korean washers, the U.S. had until Dec. 26, 2017, to implement the findings of WTO panel and appellate body rulings (See 1704130038). South Korea on Jan. 11 asked the WTO if it could retaliate at an annual amount of $711 million, with permission to increase the amount as the washing machine market grows in the United States. "The United States has explained to Korea the special challenges arising from the recommendations in this dispute. Particularly in this light, Korea’s decision is disappointing, and not constructive," a U.S. official told a WTO panel on Jan 22. The matter has now gone to arbitration.