The World Trade Organization (WTO) has approved the establishment of a dispute settlement panel to resolve a complaint launched by China against countervailing duties imposed by the United States on a wide range of manufactured goods.

In the latest chapter of the trade battle between the two countries, China claims that the United States illegitimately introduced countervailing duty measures in retaliation for Chinese state subsidies. In filing its complaint, China recognized that WTO members, by right, can adopt trade remedy measures, such as countervailing duties - used to offset market distortions caused by subsidies - but highlighted that these must be introduced in accordance with WTO rules and not be subject to any form of abuse.

The US has defended the duties, which are being imposed on imports of certain household goods, solar panels and wind towers, saying that they have been imposed within the bounds of international trade law.

Also at the latest meeting of the Dispute Settlement Body, China rejected a first request by the United States for the establishment of a panel to study China's anti-dumping and countervailing duties on certain automobiles from the United States.

In requesting a panel, the US reminded members that this was the third time that the US had brought a dispute relating to China’s “multiple failures” to apply the appropriate procedures and legal standards in its injury determination, and to adhere to transparency and basic procedural requirements set out in the Anti-dumping Agreement and Subsidies Agreement.

For its part, China said that its investigating authority had determined that vehicle imports originating from the US constituted dumping in the Chinese market, i.e. that they had been sold below the prevailing Chinese market price on export. The nation argued that this had been due to US government subsidization. The duties, China argued, had been introduced to address the material injury caused by these dumped and subsidized imports to the domestic industry in China.