The World Trade Organization (WTO) on Tuesday announced in an Appellate Body report that the revised countervailing measures imposed by the United States on imports of certain products from China were inconsistent with WTO laws.

Upholding the findings of a WTO dispute panel announced in March 2018, the Appellate Body ruled that the U.S. acted inconsistently with provisions of the subsidies and countervailing measures (SCM) agreement, in 11 of its countervailing proceedings at issue.

In 2016, China requested consultations with the U.S. to challenge the full compliance of Washington with a 2014 WTO ruling against its countervailing measures on 22 products from China.

These had come about after China resorted to the WTO in 2012 to contest U.S. anti-subsidy tariffs on Chinese exports including several metal products, steel wheels, solar panels, wind towers, steel cylinders and aluminum extrusions.

China challenged various aspects of certain countervailing duty investigations and the preliminary and final determinations that led to the imposition of countervailing duties.

Among the findings, the Appellate Body found that the U.S. Department of Commerce had failed to explain, in several of the countervailing proceedings, "how government intervention in the market resulted in domestic prices for the inputs at issue deviating from a market-determined price", underlining that "an investigator's determination of how prices in markets are in fact distorted as a result of government intervention must be based on positive evidence."

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