Thread by @CoppetainPU

China can retaliate against the US for failing to implement a ruling in an anti-dumping dispute, to the value of up to $3.6bn pa, WTO arbitrators say — probably the 2nd largest ever after the recent $7.5bn pa awarded to the US over Airbus subsidies.

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wto.org/english/news_e…

Retaliation by the complaining country (China) is allowed if the other country (US) fails to implement the ruling correctly.

It usually takes the form of high or prohibitive tariffs.

China had proposed retaliation of $7bn. The US said this was too high.

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The arbitrators agreed. The $3.6bn awarded is designed to ensure the loss of trade (US exports to China) does not exceed the calculated damage caused to Chinese exports to the US as a result of the illegal methods the US used to calculate anti-dumping duties.

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In May 2017 WTO dispute rulings went against the US for

1. use of the weighted average to transaction (WA-T) method with zeroing in cases of “targeted” dumping

2. the treatment of multiple Chinese exporters as a single government-controlled entity.

wto.org/english/tratop…

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“Zeroing” is a particularly controversial method the US uses to calculate the size of dumping (the dumping margin). Explained here: tradebetablog.wordpress.com/2019/08/21/bot…

Repeated rulings against the US’s use of zeroing is an important factor in the crisis facing the WTO Appellate Body

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P.S. it's the third largest. In 2002–3 the EU was awarded retaliation of $4bn in a case against US “Foreign Sales Corporation” subsidies.

Thanks to @DavidKleimann for pointing that out.

wto.org/english/tratop…