Trade Tensions in the Background of IMF-WB Meet

The Spring Meetings in the US capital city next week are expected to feature high-profile debates over the current macroeconomic context, particularly on trade. The 16-22 April event has as its theme “Meeting Global Aspirations and Challenges” and includes within its packed schedule meetings on technology and the digital economy, carbon pricing, and the gender divide. 

The IMF-WBG meetings are held biannually and provide a forum for finance and development ministers from their 189 member countries, among others, to address opportunities and risks to the global economy and development prospects, along with potential reforms to the two organisations.

Among the more high-profile of these trade developments was the US move to enact global tariffs on imported steel and aluminium, citing national security grounds. Those duties are now in place, minus a selected group of countries which have received a temporary exemption from the US, currently set to last through 1 May unless other deals are reached.

In addition, the prospect of US tariffs on various Chinese products, among other measures, in response to alleged intellectual property rights concerns has fuelled a public row between officials in Washington and Beijing. These US steps are under a “Section 301” action, named for the provision under the 1974 Trade Act which delineates possible steps the US executive can take to ensure “relief from unfair trade practices,” following an investigation and in line with specific requirements.

The US published a proposed list covering 1300 tariff lines of Chinese goods, which could end up facing hefty tariffs as part of these “Section 301” actions. The move has since drawn a public rebuke from China, which has said that while it prefers to address the issue via the WTO, they are also preparing other contingency measures. Meanwhile, Washington is now examining whether more actions under “Section 301” might be warranted.

“The US’ approach has seriously violated the basic principles and spirit of the WTO. China intends to immediately appeal to the WTO dispute settlement mechanism for the US’ practices,” the spokesperson continued, adding that Beijing is concurrently putting together “measures of equal strength and scale on the US products according to the relevant provisions of the Foreign Trade Law of the People's Republic of China.” 

China has since filed the above-mentioned WTO challenge, submitting a request for consultations last week focused on the proposed list of products. Separately, China has also launched a WTO dispute on the steel and aluminium tariffs.