July 17 (UPI) -- The United States is in breach of a World Trade Organization ruling and is subject to sanctions from China unless it removes certain tariffs against Beijing, the international trade body ruled Wednesday.
The ruling by WTO appellate judges stems from a 2012 complaint by China against anti-subsidy tariffs imposed by the Obama administration. The tariffs affected exports like solar panels, steel pipes and lawn mowers worth about $7.3 billion.
The ruling Wednesday said the U.S. tariffs were unfair and open the door to new sanctions from Beijing.
WTO judges held that while some of the Chinese goods were subsidized by the government, evidence indicates U.S. officials did not correctly measure the influence of that government support.
"[W]e uphold the panel's finding ... that China has demonstrated that the United States acted inconsistently," the WTO said in a statement.
The U.S. Trade Representative's office said the ruling requires the United States to either use distorted Chinese prices to measure subsidies or provide additional evidence beyond the hundreds of pages already submitted to the court.
"This conclusion ignores the findings of the World Bank, OECD working papers, economic surveys and other objective evidence, all cites by the United States," the USTR said in a statement. "[It] undermines WTO rules, making them less effective to counteract Chinese [state-owned enterprises] subsidies that are harming U.S. workers and businesses and distorting markets worldwide."
Subsidies could amount to anything from free and cheap electricity given to factories to tax credits and access to cheap capital.
"The United States is determined to take all necessary steps to ensure a level playing field so that China and its SOEs stop injuring U.S. workers and businesses," the USTR said.
The ruling comes amid a trade conflict between the two nations that's now in its second year.