The tariffs imposed by United States on Chinese goods in 2018, triggering a trade war, were “inconsistent” with international trade rules, World Trade Organization has ruled.
The WTO said the US did not provide evidence that its claims of China’s unfair technology theft and state aid justified the border taxes.
Chinese officials welcomed the ruling.
But the US said it showed that the WTO was “completely inadequate” to the task of confronting China.
Ambassador Robert Lighthizer, America’s top trade negotiator, said the US “must be allowed to defend itself against unfair trade practices”.
“This panel report confirms what the Trump Administration has been saying for four years: The WTO is completely inadequate to stop China’s harmful technology practices,” he said.
“Although the panel did not dispute the extensive evidence submitted by the US of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct.”
In a statement on Tuesday, China’s Commerce Ministry said it hoped the US would respect the rulings of the World Trade Organisation (WTO) and take practical action to maintain the multilateral trading system.
The Trump administration, which has repeatedly criticised the WTO, may appeal the decision.
China brought the case to the WTO in 2018, as the Trump administration started preparing the first rounds of tariffs on what would eventually become more than $300bn worth of products. The complaint challenged tariffs enacted in June and September of 2018 on goods estimated at more than $200bn in annual trade.