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China Wins WTO Case Against U.S. Dumping Rules, Which Has Limited Impact on Global Trade Wars

published: 2016-10-24 16:21

The U.S. has launched various trade barriers to prevent dumping of low-priced products from China. Since 2012, the U.S. has imposed anti-dumping and countervailing duties on PV imports from China twice. Later, the Chinese government complained to the World Trade Organization (WTO) of the U.S. violation of WTO principle and won the case. Yet, EnergyTrend believes that China’s case winning won’t have much impact on the ongoing trade wars in the short run.

The country's complaint to the WTO includes solar PV energy, electrical/mechanical engineering, and many other industries, affecting an annual export value of US$ 8.4 billion, according to the Chinese Ministry of Commerce. China filed the lawsuit in December 2013, accusing that the U.S. used an unfair dumping standard for Chinese enterprises when conducting anti-dumping investigation on Chinese products, which brought negative impact on the commercial interest of Chinese companies as well as violated the WTO’s fair trade principle.

The WTO Committee found fault with the U.S. practices of determining dumping margins in certain cases of "targeted dumping," in which foreign firms cut prices on goods aimed at specific U.S. regions, customer groups or time periods, according to Reuters. Dumping is normally found when a foreign producer's U.S. prices are lower than its home market prices for the same or similar goods, or when the imports are sold at prices below production costs.

Either side can appeal the ruling within 60 days.

EnergyTrend analysis: Not much impact in the short run

If the U.S. turns out to really violate the WTO principle, they may need to lower or even remove the anti-dumping and countervailing duties imposed on Chinese PV products. Therefore, Chinese products may regain their price advantages once again.

However, it usually takes a long period of time for international trade litigation. As a result, EnergyTrend believes that China’s case winning won’t have much impact on the PV trade relationship between China and the U.S. But what’s worth paying attention to is WTO’s ruling this time means trade barriers will gradually be eliminated. Manufacturers’ competitiveness will be the key to the market survival.
Source: Reuters

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