China files WTO challenge to Trump's $200 billion tariff plan

President of the European Council Donald Tusk

President of the European Council Donald Tusk

Experts say China will likely be looking to establish some kind of anti-U.S. alliance that Beijing could use as a counterbalance to the United States amid its tariff dispute with the USA president.

Resolving worldwide trade disputes is a key role of the WTO.

Besides the steel and aluminium tariffs on the EU, Russia and major USA trading partners, Mr Trump earlier this month implemented tariffs on $34 billion worth of Chinese imports, drawing a tit-for-tat response from Beijing.

Trump's slapping of tariffs on steel and aluminium as well as threats of new duties on the automotive industry, have unnerved Washington's trade partners throughout Europe, particularly Germany.

Unnerved by the retaliatory threats, the US President said he'd imposed a further 10 percent tariff on £150bn worth of Chinese imports, leading to accusations of trying to initiate a trade war.

China's economic growth slowed in the quarter ending in June, adding to challenges for Beijing amid a mounting trade tariff battle with Washington. Tusk on Twitter called it "fake news", saying America and the European Union are "best friends".

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The Trump administration has criticized the WTO as unable to deal with the problems posed by China, suggesting a challenge there might have little impact in Washington.

"We need new rules in the field of industrial subsidies, intellectual property and forced technology transfers, reduction of trade costs, as well as a new approach to development and more effective dispute settlement", Tusk stressed.

After China retaliated, the US Trade Representative proposed an additional $200 billion in tariffs.

Li said China's determination to improve the domestic business environment and its support for the multilateral trading system will not change.

But Mogherini, speaking to reporters upon arriving for talks with European Union foreign ministers, said Europe has many other friends in the world, citing in particular Japan, with which it is signing a massive trade deal on Tuesday.

As for the reasons behind a trade imbalance between the two countries, China blamed Americans' low savings rate and other broad economic issues. But Chinese officials have tried to appeal to American companies as allies. "If the United States shows an intention to back off, China would definitely compromise", Liao said.

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That means headwinds not just for China's economy, but for the world's too. "The first clear outcome can only be that we need to align ourselves even more closely in Europe".

Apart from trade and market access, the two sides have recently clashed over the Eurasian connectivity vision of China's massive Belt and Road Initiative (BRI), an ambitious $1 trillion infrastructure project that aims to bolster China's trade and investment links with economies in Asia, Africa and Europe.

Data released since Friday has affirmed what's been expected for some time: That an ongoing campaign to curtail credit is putting the brakes on the world's second-largest economy.

European Council President Donald Tusk, third from right, and European Commission President Jean-Claude Juncker, fourth from right, meet with Chinese Premier Li Keqiang at left at the Great Hall of the People in Beijing, China, Monday, July 16, 2018.

The EU has been careful not to side with China on the trade dispute.

The EU and China announced plans June 25 to form a group to work on updating WTO rules.

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