Answer to Question #76964 in Economics of Enterprise for Legesse

Question

The USA and People Democratic Republic of China are recently in trade war. The USA initially imposed additional tariff on aluminum products coming from China. The Chinese government retaliated against the USA by imposing additional tariff on good coming from the USA. Nevertheless, neither country is claimed to violate WTO law. How do these countries manage to increase import tariff without violating their WTO tariff commitment?

Answer 1

If the US wants, it can raise the applied tariff level, without compensation or justification, solely as a matter of national policy choice, to the level of the “bound” tariff. The bound tariff level is just that, an upper bound – it constitutes a statement that the importing country is giving to the world about the maximum level that the tariff will go.
Source:
https://blogs.lse.ac.uk/internationaldevelopment/2018/03/07/the-problem-with-trumps-protectionism/