FILE PHOTO: US and Chinese flags are seen before Secretary of Defense James Matisse welcomes Chinese Secretary of Defense General Wei Feng at the Pentagon in Arlington, Virginia, USA, November 9, 201
The decision came when the two largest economies in the world were trying to reach Phase 1 of a trade deal. President Donald Trump and US negotiators are "very optimistic" about his conclusion, White House adviser Larry Kudlow said.
In a WTO decision, the three-member arbitration panel stated that Chinese exporters were suffering a trade impairment of $ 3.579 billion annually. China may now ask the WTO Dispute Settlement Body for a green light to impose rewards tariffs on imported goods in the US, estimated at that amount each year.
China told the WTO in September 2018 that it had suffered $ 7.043 billion in damages annually as a result of US anti-dumping duties illegally imposed by the WTO Group in 2016 and subsequently confirmed. Therefore, China has requested permission to raise trade barriers for US goods to the same amount as allowed under WTO rules.
As the Trump administration objected to the amount, the matter was referred to arbitration.
The case concerns dumping duties in the United States on industry, including machinery and electronics, light industry, metals and minerals, and the US Department of Commerce's calculation of the amount of dumping, Chinese exports valued at undercut US manufactured goods on US market.
The US method of calculation, known as "nullification", has tended to raise the level of US anti-dumping duties on foreign producers and has repeatedly been declared illegal in a number of WTO trade disputes.
The US Attorney's Office in Washington has no immediate response.
Reporting and Writing by Stephanie Nebehai; additional reporting by Andrea Shalal in Washington; edited by John Miller & Hugh Lawson