China's new trade dispute with the U.S. could test Washington's commitment to the World Trade Organization, which has so far escaped the scrutiny of President Donald Trump, a critic of multilateral institutions, trade sources said on Thursday.
The Geneva-based body said on Wednesday that China had formally launched a dispute at the WTO over a 10% tariff imposed by Trump on Chinese goods, in moves that raised fears of a new trade war between the world's two largest economies.
Unlike other global organisations from which Trump plans to withdraw or disengage, the global trade watchdog has avoided early criticism from the White House. In Trump's first term, a top U.S. trade official criticised the organisation as "completely inadequate".
Trade delegates and analysts said there was a possibility this latest dispute on Chinese goods -- and especially any future WTO ruling against the U.S. -- could prompt a hostile reaction towards the body.
"The current administration is nothing if not quick to vengeance, and as the WHO has recently learned it's impossible to rule anything out once President Trump or his advisers decide the U.S. has been aggrieved by a multilateral institution," said Dmitry Grozoubinski, executive director of the Geneva Trade Platform think tank, in response a question about the dispute's impact.
Such possible hostile acts from the U.S. administration might include withholding funding, blocking the appointment of trade negotiation chairs or simply withdrawing, he said.
A spokesperson for nominated U.S. trade representative Jamieson Greer did not immediately respond to a request for comment.
A similar dispute raised by China against the U.S. drew the Trump's administration's ire when the WTO ruled against Washington in 2020. But he never made good on a threat to withdraw from the organisation, which the U.S. was instrumental in creating.
It did however, maintain a policy of blocking judge appointments to the top court, which has paralysed the WTO Appellate Body since December 2019. This means that while an interim ruling on the latest China-U.S. dispute could be expected in late 2025 or early 2026, a final ruling is unlikely to be made since either party can appeal it into a legal void.
According to WTO rules, the next step is for Washington to reply to China's complaint within 10 days and then start consultations within 30 days "with a view to reaching a mutually satisfactory solution."
Any refusal by Trump's team to answer would be nearly unprecedented, according to trade sources. "They (Washington) has always complied in the past, but we are in a new era," said one of the trade sources.
