Global trade war: tensions spill into WTO session over China overcapacity, Trump tariffs

An obscure committee in Geneva became the latest battleground in the global trade war on Tuesday as Chinese diplomats clashed with counterparts from the United States, Europe, Japan and others over claims of Beijing’s industrial overcapacities and Washington’s swingeing tariffs.

Tensions threatened to boil over at the World Trade Organization’s Committee on Subsidies and Countervailing Measures as a US-led group of members attacked China for its alleged subsidies and industrial overflows.

In heated responses, Beijing turned the tables on those countries’ own trade policies, lashing out at US President Donald Trump’s “reciprocal tariffs”, the US’ subsidies for its chips industry, as well as EU duties on Chinese-made electric vehicles, according to Geneva trade sources.

The stormy session showed the precarious nature of the global trading system and profiled what appeared to be irreconcilable differences between some of the world’s key trading nations.

According to the sources, the US first took the floor to claim that China’s “extensive, state-driven subsidies are uniquely responsible for persistent and harmful global overcapacity”. The US representative said subsidies, including “cheap land” and “large-scale financing”, “artificially boost production in sectors like steel, solar, electric vehicles and chemicals far beyond domestic or global demand”.

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‘Fake news’: Chinese officials dismiss claims of US trade war consultations

The US representatives claimed the trend was causing factories to close from South Africa to India, and that China’s “reluctance to discuss the issue highlighted how sensitive the matter is for China and how it seeks to avoid transparency regarding the impact of its subsidies”, the source said.

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