The World Trade Organization gave China the go-ahead on Friday to impose sanctions on up to $3.6 billion of American goods in a fight over unfairly cheap Chinese goods, a decision that is likely to further inflame the Trump administration’s antipathy toward the global trade body, according to The New York Times.
The ruling is the final decision in a case China brought against the United States nearly six years ago that stemmed from levies placed on more than 40 Chinese goods. The duties were imposed during the Obama administration, but the practice they were intended to curb remains one of the Trump administration’s biggest economic concerns about China.
At issue are subsidies that the United States has accused China of providing to its companies so that they can sell goods cheaper overseas. To stop China from flooding the American market with dozens of low-cost Chinese products — including solar panels, furniture, shrimp, steel pipe, tires and washing machines — the United States imposed “anti-dumping duties” on those goods.
A 2017 decision by the World Trade Organization found that the United States had not followed the global trade body’s rules in the way it imposed the duties. On Friday, the W.T.O. gave China the green light to try to recoup some of the losses it sustained by imposing enough tariffs on American goods to block $3.6 billion worth of American exports to China.
China has not yet indicated which American products it will hit with tariffs and it is unclear whether the United States would retaliate. Under the W.T.O. rules, China can keep the tariffs in place until the United States changes its behavior or the two countries agree to some type of resolution.
A Trump administration official said that the United States was “disappointed” by the decision, saying that it overstated the financial effect on China and used an approach that “has no foundation in economic analysis.” He added that the United States did not plan to change the practices that the W.T.O. had objected to, including how it determines the level of duties it should impose on Chinese goods. That means any tariffs China imposes could remain in place indefinitely.
The case is separate from President Trump’s trade war with China, which has taken place outside of World Trade Organization rules and resulted in the United States placing tariffs on $360 billion worth of Chinese goods.
But it could further complicate relations between the world’s two largest economies as they try to reach an agreement to end their yearlong trade fight. China has already retaliated against the United States with tariffs on roughly $100 billion worth of American products and Mr. Trump has dangled the possibility of additional tariffs if Beijing does not agree to the administration’s demands. Both sides have already suffered economic pain from the tit-for-tat tariffs.
Beijing could use the threat of these tariffs as a source of leverage in trade negotiations. But China, which imports far fewer American goods than it exports to the United States, has been reluctant to increase the tariffs it has already imposed, because it could raise costs for essential products like medical devices and food.
The ruling could have bigger consequences for the future of the W.T.O. The administration has already criticized the global trade body, including its inability to write rules that deter China from providing generous subsidies to its industries.
Clete Willems, a partner at Akin Gump who left the White House earlier this year, said the ruling exemplified some of the administration’s most significant concerns about the W.T.O. — its failure to come to terms with the role of the state in China’s economy.
“As a result, China is permitted to get away with behavior that wouldn’t be tolerated in any normal market economy,” Mr. Willems said. “The ruling defangs our ability to counteract subsidies provided by Chinese state-owned enterprises.”
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