WEAPONIZATION OF CUSTOMS DUTIES: THE US–CHINA TRADE WAR

AUTHOR – SAMBIT SATPATHY, STUDENT AT KIIT SCHOOL OF LAW, BHUBANESWAR, INDIA

BEST CITATION – SAMBIT SATPATHY, WEAPONIZATION OF CUSTOMS DUTIES: THE US–CHINA TRADE WAR, ILE TAXATION LAW AND LEGAL STUDIES (TLLS), 3 (1) OF 2025, PG. 15-21, APIS – 3920 – 0024 & ISSN – 2583-9551

ABSTRACT

This paper examines how the United States and China have deployed customs tariffs as political instruments during the recent trade conflict, focusing on legal constraints under WTO law. It analyses the WTO’s basic tariff obligations (most-favoured-nation and tariff bindings) and exceptions (GATT Articles XX and XXI), and reviews key dispute settlement rulings. We detail the U.S. Trade Act’s Section 301 framework, through which the U.S. imposed unilateral tariffs on Chinese imports, and China’s retaliatory duties and domestic counter-measures rules. The analysis shows that WTO panels found both sides’ tariffs inconsistent with GATT obligations (breaching Articles I and II)^[1]. The cases highlight the limits of WTO law: U.S. justifications under Article XX(a) (“public morals”) were rejected, and while the U.S. cited the security exception (Article XXI) for steel tariffs, WTO panels have largely refused to accept such broad defences. China’s introduction of anti-sanctions and countermeasures laws underscores its turn to extrajudicial tools. These developments strain the multilateral dispute system and raise acute rule-of-law concerns in global trade.

Keywords: US–China trade war, Customs tariffs, WTO law, GATT obligations, Most-Favoured-Nation (MFN), Tariff bindings, GATT Article XX, GATT Article XXI, Public morals exception, National security exception, Section 301 (U.S. Trade Act), Retaliatory duties, China countermeasures law, Anti-sanctions measures, WTO dispute settlement, Rule of law in global trade

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