On November 1, 2019, the World Trade Organization (WTO) granted China clearance to levy $3.5 billion of duties on U.S. goods in response to a WTO case where China challenged a wide-range of U.S. anti-dumping duties. The U.S. initially placed anti-dumping duties on China in an effort to fight cheap Chinese goods from flooding the U.S. market. However, the Chinese alleged that the U.S. anti-dumping calculation method of “zeroing”, which has been determined illegal at the WTO, has been artificially inflating dumping margins for Chinese exporters.

China brought the case to the WTO six years ago in response to the U.S. placing anti-dumping duties on more than 40 Chinese goods, including Chinese furniture, solar panels and steel products. In 2017, the WTO ruled that the United States did not comply with the organization’s rules and guidelines in the way it implemented anti-dumping duties. Beijing hoped to score more than $7 billion worth of retaliatory duties but the WTO decided to award only half of China’s original ask.

This decision comes at a time of high-tension between the world’s largest economies and hits at several longstanding disputes. China is also chasing another $2.4 billion worth of retaliatory tariffs in relation to U.S. countervailing duties. Countervailing duties, commonly referred to as anti-subsidy duties, are import duties designed to neutralize the effects of government subsidies. The United States has long defended the use of countervailing duties at the WTO in response to Chinese-subsidized goods.