Customs

On 08 April 2025, the World Trade Organization (WTO) advised that the People’s Republic of China (China) had requested dispute consultations with the United States of America (US) concerning the measures which it says imposed a 10% additional duty on imports from all trading partners effective 05 April, and a 34% additional duty on imports from China that were due to become effective on 09 April 2025. The request was circulated to WTO members on 08 April 2025.

China claims the measures are inconsistent with the US’ obligations under various provisions of the General Agreement on Tariffs and Trade (GATT) 1994, the Agreement on Customs Valuation (ACV), and the Agreement on Subsidies and Countervailing Measures (ASC).

Further information is available in document WT/DS638/1, which is copied below.

UNITED STATES – UNIVERSAL AND COUNTRY-SPECIFIC ADDITIONAL DUTIES ON IMPORTS FROM CHINA REQUEST FOR CONSULTATIONS BY CHINA

The following communication, dated 04 April 2025, from the delegation of China to the delegation of the United States, is circulated to the Dispute Settlement Body in accordance with Article 4.4 of the Dispute Settlement Understanding (DSU).

_______________

My authorities have instructed me to request consultations with the Government of the US pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the DSU, Article XXIII of GATT 1994), Article 19 of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs Valuation Agreement), and Article 4 and 30 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement), with respect to the US’s so-called ‘reciprocal tariff’ measures that impose additional duties on products from all its trading partners, including the People’s Republic of China.

I. MEASURES AT ISSUE

1. On 2 April 2025, the United States issued the fact sheet1 and the Executive Order entitled Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits 2 (hereinafter the “Executive Order”), that impose additional tariffs on all imports from all of United States’ trading partners. A universal additional ad valorem rate of duty of 10%, effective on 05 April 2025, is imposed on products from all US trading partners. Subsequently, for the US trading partners as enumerated in Annex 1 to the Executive Order, a country-specific additional tariff, effective on 09 April 2025, would apply and the duty rate shall increase from 10% to the rate as set forth in the above mentioned Annex.

2. As a consequence, all products originating in China are subject to a 10% additional tariff, effective on 05 April 2025, and a 34% additional tariff, effective on 09 April 2025. The additional tariffs are imposed in addition to any other duties or charges applicable to the imported products, including the US bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994, and the country-specific tariffs in particular, accord differential treatment to products originating from different WTO Members.

3. Additionally, the exemption of the so-called ‘U.S. content’ of a product from the additional tariffs as specified in Section 3(f) involving the application of unjustified customs valuation methods and the foregone government revenue that is otherwise due provides a more favourable condition for certain imported products and the export of domestic products.

4. The measures at issue, adopted by the US unilaterally on the alleged basis of ‘reciprocity’ and ‘trade balance’, are a clear breach of its own WTO obligations and commitments, seriously undermine the rules-based multilateral trading system, and are discriminatory and protectionist in nature.

5. The legal documents through which the US imposes and administers the measures at issue include, inter alia:

• The International Emergency Economic Powers Act of 1977, 50 U.S.C 1701 et seq;
• The National Emergencies Act, 50 U.S.C. 1601 et seq;
• Section 604 of the Trade Act of 1974, 19 U.S.C. 2483;
• Executive Order of 02 April 2025: Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual US Goods Trade Deficits, effective on 05 April 2025; and
• Fact Sheet: President Donald J. Trump Declares National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security.

6. The measures at issue also include any amendments, supplements, or extensions to the measures specified above, as well as any closely connected, subsequent, replacement or implementing measures.

7. LEGAL BASIS OF THE COMPLAINT

The measures at issue appear to be inconsistent with the US’s obligations under the following provisions of the GATT 1994, the Customs Valuation Agreement, and the SCM Agreement, including:

• Article I:1 of the GATT 1994, because the measures at issue fail to extend immediately and unconditionally to products originating in China an “advantage, favour, privilege or immunity” granted by the US “[w]ith respect to customs duties and charges of any kind imposed on or in connection with” the importation of products originating in the territory of other members.
• Article II:1(a) and (b) of the GATT 1994, because the US imposes additional tariffs on all imported products originating in China as identified in measures above that are in excess of United States bound rates in its Schedule of Concessions and Commitments annexed to the GATT 1994, and therefore fails to accord to the products originating in China and imported into the US treatment no less favourable than that provided for in the US’s Schedule of Concessions and Commitments annexed to the GATT 1994.
• Article X:3(a) of the GATT 1994, because the US does not administer the measures at issue in a uniform, impartial, and reasonable manner.
• Articles 1.1 and 8 of the Customs Valuation Agreement, and the relevant interpretative Notes in Annex I thereto, as well as paragraphs 1 and 2 of the General Introductory Commentary of the Customs Valuation Agreement, and Articles VII:1, VII:2(a), (b) and (c) of the GATT 1994, because the United States, by excluding the value of the “U.S. content” of the imported products from the application of the additional tariffs, fail to use the transaction value, that is the price actually paid or payable for the goods, as the basis for customs value, and applies unjustified adjustment or valuation methods for customs purposes.
• Articles 3.1 and 3.2 of the SCM Agreement, because the US, by excluding the value of the “U.S. content” of the imported products from the application of the additional tariffs, provide subsidies, within the meaning of Article 1 of the SCM Agreement, contingent in law or in fact, upon export performance and the use of domestic over imported goods. The available evidences are the documents listed in the Measures at Issue above.

8. In addition, and as a consequence of the foregoing, the measures at issue appear to nullify or impair benefits accruing to China, directly or indirectly, under the cited agreements.

9. China reserves the right to raise additional measures and claims regarding the matters identified herein during the course of consultations and in any future request for the establishment of a panel.

10. China looks forward to receiving the reply of the US to this request and to setting a mutually convenient date for consultations.