Market News & Headlines >> U.S. Formally Seeks WTO Panel on China Grain Import Quotas

In a move that is likely to heighten trade tensions between the U.S. and China, the Trump administration has formally requested a World Trade Organization dispute panel be convened to investigate China’s administration of its tariff-rate quotas (TRQ) for agricultural products, the WTO said on Monday. 

The U.S. challenge, which includes tariffs for wheat, rice, and corn, was initiated by the Obama administration which sought consultations on Dec. 15 and has since been joined by Australia, the European Union, Canada and Thailand as third parties. 

The item appears on the formal agenda of the WTO's Dispute Settlement Body (DSB) meeting set for Aug. 31. China can block this first formal request, but if the U.S. makes a second request at a later DSB meeting, the panel will be set up unless all WTO members agree to block it. 

In December, the U.S. Trade Representative (USTR) said China's administration of its TRQ program breached its WTO commitments and hurt U.S. farm exports. The USTR said that even though global prices for the three commodities were lower than China’s domestic prices, it did not maximize its use of the TRQs, which offer lower duties on certain volumes of imported grains each year, thereby limiting grain imports from the U.S. and other countries.