China seeks WTO backing for $7 billion sanctions on U.S. over dumping duties

GENEVA (Reuters) – China told the World Trade Organization (WTO) on Tuesday it wanted to impose $7 billion a year in sanctions on the United States in retaliation for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.

The request for authorization from the WTO to introduce the sanctions is likely to lead to years of legal wrangling over the case for the penalty and the amount.

China initiated the dispute in 2013, complaining about U.S. dumping duties on several industries including machinery and electronics, light industry, metals and minerals, with an annual export value of up to $8.4 billion at the time.

China’s request for authorization, published by the WTO, said the latest available data showed it had suffered $7.043 billion in damages annually, and therefore it requested permission to raise trade barriers on U.S. goods to the same amount, as allowed under WTO rules.

China won a WTO ruling in the dispute in 2016, and that judgment was confirmed by an appeal last year.

The case concerned the U.S. Commerce Department’s way of calculating the amount of “dumping” – Chinese exports that are priced to undercut American-made goods on the U.S. market.

The U.S. calculation method, known as “zeroing”, tended to increase the level of U.S. anti-dumping duties on foreign producers and was repeatedly ruled to be illegal in a series of trade disputes brought to the WTO.

The string of U.S. defeats fueled U.S. President Donald Trump’s campaign to reform the WTO. Trump said last month the United States could withdraw from the WTO if “they don’t shape up”.

China told the WTO last month that the deadline for the United States to comply with the ruling expired on Aug. 22.

The WTO published an agenda on Tuesday for a meeting of its dispute settlement body on Sept. 21, showing China planned to take the legal step of asking for authorization for sanctions.