Trade tensions between China and the US reached new heights in April as Washington hit Beijing with two WTO complaints and a paper tariff. The moves were seen as an attempt to force action from Beijing over its undervalued currency and surging trade surplus with the US.
The tariffs of 10-20% on glossy paper imports from China came after a US court ruled that the Department of Commerce could consider penalties in disputes over "unfair" government subsidies. By taking action on subsidies, analysts said the US made a significant about-turn on its policy of treating China as a non-market economy.
There are also concerns that this action could spill over into other industries that have been described as unfairly subsidized such as steel and textiles.
The tariffs were followed in April by two WTO grievances: one on intellectual property rights (IPR) protection and the other on market access for US movies, DVDs, books and music.
US officials accused China of ‘’unacceptably high” levels of copyright infringement and intellectual property piracy. They said that, despite previous Chinese efforts to cut down on piracy, unnecessarily high thresholds must be met before the government will begin criminal prosecution.
"State-run import companies can impose high costs and build in delays that give IPR pirates a leg up in the marketplace, all to the detriment of our exporters and China’s consumers," said US Trade Representative Susan Schwab.
It’s not the first time this year the US has voiced trade deficit concerns. In March, it threatened tariffs on other imports and complained in February over subsidies of manufactured goods.
Meanwhile, US Senate Finance Committee has begun work on a revised version of the trade bill put forward by Senators Schumer and Graham that called for a 27.5% tariff on all Chinese imports unless steps are taken to raise the value of the yuan.
Schwab said the actions should not be viewed as hostile actions but China still reacted strongly. Having denounced the paper tariffs as "against the consensus reached by leaders of both countries", Ministry of Commerce spokesman Wang Xinpei warned that the WTO complaints would "adversely affect bilateral trade".