China seeks World Trade Organisation backing for US$7 billion sanctions on United States over dumping duties

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

The request for authorisation 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 US dumping duties on several industries including machinery and electronics, light industry, metals and minerals, with an annual export value of up to US$8.4 billion at the time.

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China’s request for authorisation, published by the WTO, said the latest available data showed it had suffered US$7.043 billion in damages annually, and therefore it requested permission to raise trade barriers on US 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 US Commerce Department’s way of calculating the amount of “dumping” – Chinese exports that are priced to undercut American-made goods on the US market.

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

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The string of US defeats fuelled US 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 August 22.

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