U.S. and Chinese ambassadors to the World Trade Organization clashed at the regulatory body’s general council meeting in Geneva on Tuesday.  Beijing lashed out at President Trump’s proposed tariffs on $150 billion of Chinese goods in retaliation for alleged violations of intellectual property as well as import tariffs of 25 percent on steel and 10 percent on aluminum in the name of preserving national security. The steel and aluminum levies went into effect in March.

Washington defended its measures and criticized China’s vows of retaliation.  “It is amazing to watch a country that is the world’s most protectionist, mercantilist economy position itself as the self-proclaimed defender of free trade and the global trading system,” said Deputy U.S. Trade Representatives Dennis Shea on Tuesday.  “White is black, Up is down.”

The trade brawl came less than a week after Treasury Secretary Steven Mnuchin led a U.S. delegation to China to try and negotiate a way out of the rising tensions. Mnuchin ended trade negotiations in China with little progress other than agreeing to keep talking.

President Donald Trump tweeted on Tuesday that he would speak to Chinese President Xi Jinping on trade, “where good things will happen.” Xi’s top economic adviser, Vice Premier Liu He, will travel to Washington next week for follow-up trade talks.

Tuesday’s meeting “was extraordinary in its intensity,” WTO spokesman Keith Rockwell said.  “We had the two most powerful members of the WTO weighing in on their views of each other’s policy in a way I have not seen in my many years here.”

China and the European Union, which received waivers from the steel and aluminum levies until the end of the month, have said they would retaliate.

The U.S. tariffs on steel and aluminum cannot be justified on national security grounds and the measures may “trigger systemic risks undermining the multilateral trading system,” said European Union Ambassador Marc Vanheukelen at the meeting.  The EU “and its member states are very concerned by the direct and indirect impact that the measures could have on the U.S. market, the EU market, and on third country markets,” he said.

In addition, several WTO members found fault with the United States refusal to appoint new members to the WTO’s appellate body, which could render the decision-making body powerless by 2019 as it will not have the required number of panelist to sign off on rulings.

“Without such a system, the WTO trade rules will no longer be effectively enforced and the trust and credibility of the multilateral trading system will be deeply undermined,” Chinese Ambassador Zhang Xiangchen said at the meeting.

“The truth is, it is China that is the unilateralist, consistently acting in ways that undermine the global system of open and fair trade. The WTO must avoid falling down this rabbit hole into a fantasy world, lest it lose all credibility,” said Deputy U.S. Trade Representatives Dennis Shea.



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