Jakarta, CNBC Indonesia – World Trade Organization (WTO) announced the “end” of the trade war between the United States (US) and China that has been going on for about three years.
On Wednesday (9/16/2020), the WTO ruled that President Donald Trump’s administration was the “loser”, claiming that the US was violating global trade rules by imposing billions of dollars in tariffs on its trade war on China.
In a three-member panel, the WTO said US duties violated trade rules because they only applied to China. The US is also guilty of imposing tariffs above the agreed maximum rates.
The WTO also feels that the US does not have sufficient reason to impose the tariffs. “The Panel is well aware of the broader context in which the WTO system currently operates. There is currently an unprecedented set of global trade tensions,” the agency said in its conclusion.
As a solution, the panel recommended that the US take action in accordance with its obligations. The two economies in the world are also asked to work together to resolve disputes as a whole.
This decision was well responded to by China. The country said it supported the WTO decision and asked the US to support the multilateral trading system and respect existing rules.
But on the other hand, the US has even said it is likely to file an appeal. “This panel report confirms what the Trump administration has said for four years. (That) the WTO is totally inadequate to stop China’s dangerous technological practices,” said Trade Representative Robert Lighthizer, as quoted by Reuters.
Then, what really happened until both countries were involved in a trade war?
History of the US-China Trade War
The US-China trade war began in early 2018. At that time, US President Donald Trump said several countries in the world, especially China, had harmed the US through unfair trade practices.
The trade war also happened because the US recorded a lot of deficits in its trade with other countries.
“When a country (US) loses billions of dollars due to trade with almost every country it does business with, a trade war is good and easy to win. For example, when we have a US $ 100 billion deficit with certain countries and they become ‘spoiled’, don’t trade anymore. – we won big. Easy! ” he wrote.
Since then, the White House has pursued its goal of overhauling a global trade deal by launching an import tariff attack against China followed by a spate of trade talks that are still ongoing.
But in fact, the US-China trade war has long been Trump’s goal. Prior to launching his presidential campaign in 2015, Trump had repeatedly voiced grievances for China to change its trading practices.
In a May 2014 twitter post, he said: “Remember, China is not a friend of the United States!”. Trump even turned his problems with China into his ammunition to win the presidential election in 2016.
– .
