WTO faults US over Trump’s China tariffs, urges corrective measures

The World Trade organisation (WTO), on Tuesday upheld a complaint by China over additional duties slapped by the Trump administration on some $250 billion worth of Chinese goods.

A panel of experts set up by WTO’s Dispute Settlement Body ruled the tariffs “inconsistent” with global trade rules, and recommended that the United States “bring its measures into conformity with its obligations”.

The panel was created in January last year to review US President Donald Trump’s decision to hit China with tariffs on a quarter of a trillion dollars’ worth of goods.

The tariffs imposed in 2018 marked the beginning of the trade war between the world’s two largest economies.

China’s representative told the organisation at the time that the tariffs imposed were “a blatant breach of the United States’ obligations under the WTO agreements and is posing a systemic challenge to the multilateral trading system”.

Washington has meanwhile slammed China’s complaint as “entirely hypocritical”, pointing to the “discriminatory duties on over $100 billion in US exports” imposed in parallel by China.

Tuesday’s announcement marks one of the first in a series of anticipated panel rulings over complaints filed by a long line of countries over Trump’s decision to slap them with steep tariffs on steel and aluminium imports.

China said it hoped the United States would respect the rulings of the World Trade Organisation (WTO) and take practical actions to maintain the multilateral trading system, the country’s commerce ministry said on Tuesday.

US STOCK MARKETS: Tech stocks pushed Wall Street’s main indexes higher on Tuesday as positive US factory data fueled optimism around an economic rebound, while investors looked for continued support from the Federal Reserve as its two-day meeting got underway.

The tech index jumped 0.9% as it continued to recover from a brutal sell-off earlier this month that knocked the S&P 500 and Nasdaq off their all-time highs.

Apple rose 0.6% ahead of a virtual product launch, where it is expected to unveil updated watches and iPads, but no iPhones.

“The technology stocks in many ways have become the new defensive stocks ... in a world of extremely low interest rates these stocks have offered good returns,” said Anik Sen, global head of equities at PineBridge Investments.

In its first policy meeting since Fed Chair Jerome Powell announced a more accommodative stance on inflation, the central bank could switch its Treasury purchases toward more long-dated debt to keep long-term yields low, some strategists said.

Expectations from the Fed have increased amid a stalemate in talks for fiscal relief and economic reports suggesting an uneven recovery from the coronavirus-induced recession.

Data on Tuesday showed US factory output increased strongly in August. Separately, US import prices increased more than expected for the same month, supporting the view that inflation pressures were building up.

Earlier in the day data showed China’s industrial output accelerated the most in eight months in August.

At 10:43am, the Dow Jones Industrial Average was up 125.47 points, or 0.45%, at 28,118.80, the S&P 500 was up 23.72 points, or 0.70%, at 3,407.26. The Nasdaq Composite was up 104.07 points, or 0.94%, at 11,160.72.

Tesla Inc jumped 4.2%, rising for the fifth day, as anticipation heats up for its “Battery Day” event next week, where Chief Executive Officer Elon Musk is expected to tout the latest improvements in the electric-car maker’s battery technology.

Carnival Corp slid 8.8% after it warned of a quarterly loss of $2.9 billion, as the COVID-19 pandemic brought the cruise industry to a virtual standstill.

Citigroup Inc dropped 3.5% following a report that federal regulators were preparing to reprimand the U.S. lender for failing to improve its risk-management systems.

Advancing issues outnumbered decliners for a 2.01-to-1 ratio on the NYSE and a 1.75-to-1 ratio on the Nasdaq.

The S&P index recorded 16 new 52-week highs and no new low, while the Nasdaq recorded 53 new highs and nine new lows.

Gold slipped from a near-two week high on Tuesday as the dollar rose, although hopes for a dovish monetary policy stance from the US Federal Reserve limited the safe-haven metals’ losses.

Spot gold fell 0.3% to $1,950.92 per ounce at 10:35am, after earlier climbing to its highest since Sept. 2 at $1,971.71. US gold futures eased 0.2% to $1,959.20.

“The dollar bounced off the lows and we’re seeing some sell-off in gold, but this is temporary, dovish comments from the Fed meeting and a further explanation on their new inflation targets could push gold above $2,000,” said Bob Haberkorn, senior market strategist at RJO Futures.

The dollar index rose 0.1%, making gold more expensive for buyers holding other currencies.

Investors are now awaiting a statement from the Fed’s two-day policy event, which ends on Wednesday.

Agencies