China’s demand for aluminium and steel tariff compensation from US steers WTO showdown

After considering a 15 per cent tariff on US products, China is now asking for compensation from the US for lost trade due to the aluminium and steel tariffs by Donald Trump. This may lead to a great dispute between the two nations at the World Trade Organisation.

In two filings with the WTO on Monday, China dispersed the US proclamation that the tariffs were introduced on national security ground, arguing that they were nothing but the safeguard measures and temporary trade restrictions for protecting domestic producers.

According to the data published by the Peterson Institute for International Economics, China’s aluminium and steel exports to the US are likely being affected by about US$689 million due to the tariffs imposition. In response to a such great loss, China threatened to impose tariffs on US$3 billion of US imports – including agriculture, aluminium and steel products. The ambassador of China also warned the US that all kinds of options are on table, though Beijing does not want a trade war.

In case the US rejects China’s argument that the measures are safeguards, the latter may have to ask the WTO to mediate the disagreement in a formal dispute preceding. China said it reserved the right to file a dispute at a later date, as per the filings.