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Report: WTO launches investigation into US tariffs on China

The ongoing trade spat between the U.S. and China took another turn Jan. 28, as the World Trade Organization launched an investigation into the legality of the crippling tariffs imposed by the Trump administration on China, according to Bloomberg News.

Citing an official who asked not to be named, as the investigation has not yet been made public, Beijing is contending that Trump's tariffs on $250 billion of Chinese goods thus far violate the WTO's most favored nation rules.

China claimed in a Dec. 7, 2018, request for the establishment of a WTO panel that the tariffs "exclusively apply to Chinese products," arguing that the U.S. treats its exports less fairly than those of other countries.

According to a statement seen by Bloomberg News, a Chinese delegation contended at a Jan. 28 WTO hearing that the tariffs "flagrantly violate" WTO fundamental principles. China first called for a panel to investigate the legality of the U.S. tariffs in April 2018.

The Trump administration has imposed tariffs on a total of $250 billion of Chinese imports, including a 25% tariff on $34 billion of goods in July 2018, a 25% tariff on $16 billion of goods in August 2018 and a 10% tariff on $200 billion of imports from China that went into effect in September of that same year.

The U.S. has justified the tariffs as a necessary punishment following a Section 301 investigation by the U.S. Trade Representative's Office that found Beijing was engaging in unfair trade practices, including the forced technology transfer of American companies doing business in the Asian nation and other intellectual property rights violations.

The report of the investigation comes at a sensitive time for the two countries. High-level negotiators from both countries are set to meet for two days of talks in Washington Jan. 30-31 as they work to quell the trade war that has resulted in tit-for-tat tariffs.

That final, largest batch of tariffs is slated to rise to a 25% rate should the two countries not reach a deal by March 1 in the current 90-day detente, where the two nations agreed to not impose further tariffs on one another's goods.

The WTO investigation also comes as the U.S. Department of Justice announced criminal charges, including fraud and obstruction of justice charges, against Chinese telecom giant Huawei Technologies Co. Ltd. on Jan. 28, and sought extradition of its CFO Meng Wanzhou.