On 1 November 2019, a WTO arbitrator issued a decision on the level of countermeasures that China may request with respect to the United States in the case “United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China” [DS 471]. DS 471 found that the US calculation of anti-dumping duties on 25 different Chinese products was not in accordance with the WTO agreements. Specifically, the WTO struck down the US use of zeroing, a methodology that produces higher dumping margins and has been found by multiple WTO panels in the past to violate WTO rules.
The arbitrator allowed approximately USD 3.579 Billion in countermeasures against the US based on the level of nullification or impairment concerning the anti-dumping orders at issue by calculating (using a two-step methodology referred to as the Armington model), for each order, the difference between the 2017 value of US imports from China, simulated under the first step, and the counterfactual value of US imports from China, simulated under the second step. In accordance with Article 22.4 of the DSU, China may request authorization from the DSB to suspend concessions or other obligations at a level not exceeding USD 3,579,128,000 per annum. Beijing had initially requested USD 7 Billion. China will be allowed to implement the duties once it gets formal authorization from the WTO’s Dispute Settlement Body, which is slated to meet next on Nov. 22.
