The Office of the U.S. Trade Representative announced on May 23, 2014 that the United States has prevailed in a World Trade Organization (WTO) dispute brought against China in July 2012 concerning the imposition of anti-dumping and countervailing duties (AD/CVD) on automobiles from the United States. In particular, a WTO dispute settlement panel ruled that China's measures are inconsistent with various rules contained in the WTO's General Agreement on Tariffs and Trade (GATT), Anti-Dumping Agreement (AD Agreement), and Agreement on Subsidies and Countervailing Measures (SCM Agreement) that prescribe basic requirements for countries in carrying out AD/CVD investigations. (The United States brought a separate case in September 2012 concerning "export-contingent" subsidies provided by China through a program establishing "export bases" for vehicle and auto parts industries. That case is still pending.)

Either or both parties may now appeal the ruling (panel report) to the WTO Appellate Body, and we expect that China almost certainly will do so. The appeals process would run approximately 4-6 months, after which time the Appellate Body would issue a ruling (Appellate Body report) affirming or reversing, in whole or in part, the panel report. Assuming the Appellate Body also finds China to have acted inconsistently with its WTO obligations, China would have a "reasonable period of time" – usually between 9 to 15 months – to "bring its measures into conformity" with WTO rules. If the United States believed that China had failed to come into compliance with the panel report/Appellate Body report, it could initiate WTO "compliance" proceedings that would also go through a panel and (likely) the Appellate Body, over a period of an additional 3-6 months. If China were still found out of compliance, the final remedy would be for the United States to seek approval from the WTO to retaliate against China through the "suspension of concessions," for example withholding certain favorable tariff treatment on Chinese exports. (Even though the duties at issue have expired, China may still need to modify its approach to AD/CVD procedures, so this compliance process could remain relevant.)