Asia
China files WTO complaint against Trump’s tariffs on imports

China on Wednesday filed a complaint with the World Trade Organisation (WTO) against US President Donald Trump’s imposition of new 10% tariffs on Chinese imports and cancellation of a duty-free exemption for low-value packages, arguing that these practices are ‘protectionist’ and violate WTO rules.
Beijing’s request for US trade consultations comes amid confusion among shippers and retailers over Trump’s cancellation of the ‘de minimis’ exemption for imports of packages valued at less than $800, which are widely used by e-commerce firms such as Shein, Temu, and Amazon. A Customs and Border Protection official said that all small parcels from China and Hong Kong must be cleared prior to arrival, with the potential for some cargo to be sent back without this paperwork.
The WTO announced that China has requested consultations with the US on tariffs. China argues that Trump’s new tariffs, aimed at stopping the flow of fentanyl opioids and precursor chemicals into the US, are ‘imposed on the basis of unfounded and false allegations about China.’ The duties are discriminatory, apply only to goods originating in China, and are inconsistent with the US’s WTO obligations.
The request for consultations is the start of a dispute process that could lead to a ruling that Trump’s tariffs violate trade rules. A 2020 WTO ruling had already found that Trump’s first round of Chinese tariffs violated trade regulations. However, such a victory is unlikely to come as a relief to Beijing because the WTO’s Appellate Body has been largely inoperable for years. The US has blocked the appointment of appellate judges because it considers the body to be overstepping its jurisdiction. This prevented a final judgment in the 2020 case.
Package chaos
The US Postal Service said on Wednesday it would again accept parcels from China and Hong Kong, reversing a temporary suspension that threatened to disrupt the import of millions of packages every day. “We’re all running around like headless chickens at the moment, trying to guess what’s going to happen,” said Martin Palmer, co-founder of cross-border e-commerce data provider Hurricane Commerce. “We could be back to normal in two weeks,” he added.
The Trump administration has blamed the de minimis exemption for allowing fentanyl and its precursor chemicals to enter the US unchecked. The USPS said in a statement that it is working with the US Customs and Border Protection agency to implement an effective collection mechanism for the new Chinese tariffs to minimize disruptions to deliveries.
No Trump-Xi meeting
A phone call between Trump and Chinese President Xi Jinping to discuss the new US tariffs and Beijing’s retaliatory measures has not yet been scheduled, a person familiar with the matter told Reuters. Trump said on Tuesday that he was in no hurry to talk to Xi because the tariffs went into effect just after midnight Eastern Time.
China has responded with tariffs targeting US imports of coal, liquefied natural gas, crude oil, and farm equipment and has opened an anti-monopoly investigation into Alphabet’s Google. The start of the new trade war caught the retail and transport sectors off guard.
“There was really zero time to prepare for this,” said Maureen Cori, co-founder of New York-based consultancy Supply Chain Compliance, adding: “What we really need is some direction from the government on how to handle this situation without warning or notice.”
Tariff uncertainty
In his first media interview since taking office on Wednesday, US Treasury Secretary Scott Bessent defended Trump’s tariff strategy, saying it was aimed at bringing manufacturing back to the US, including sectors that have largely left US shores.
Federal Reserve officials on Wednesday cited major policy uncertainty over tariffs and other issues stemming from the early days of the Trump administration as among the most significant challenges in determining where to take US monetary policy in the coming months. Chicago Fed President Austan Goolsbee warned that it would be a mistake to ignore the potential inflationary impact of tariffs, while Richmond Fed President Thomas Barkin said it was impossible at this early stage to know where the cost increases from tariffs would be absorbed or how they would be passed on to consumers.