The World Trade Organization said on Wednesday that discussions on trade tensions were "constructive," after China accused the United States of imposing "tariff shocks" that could upend the global trading system.

China condemned tariffs launched or threatened by U.S. President Donald Trump at a WTO meeting on Tuesday. Washington dismissed China's comments as hypocritical.

Trump has announced sweeping 10% tariffs on all Chinese imports, prompting Beijing to respond with retaliatory tariffs and to file a WTO dispute against Washington in what could be an early test of Trump's stance towards the institution.

The majority of the six countries that participated in the talks on trade turbulence, put on the agenda by China, raised concern about mounting tensions, but also called for restraint, said WTO spokesperson Ismaila Dieng in a press conference in Geneva on Wednesday.

The United States, Nicaragua, Namibia, Malaysia, Trinidad and Tobago, and Russia took part in the discussions, which were part of broader talks on trade.

The large majority "stressed the importance of upholding WTO principles and values and called for action to preserve the stability and effectiveness of the global trading system," Dieng added.

Two trade sources at the meeting told Reuters that some countries expressed deep concern about the ramifications of tariffs, while others criticized China for alleged market distortions.

It is the first time that mounting trade frictions were formally addressed on the agenda of the watchdog's top decision-making body, the General Council.

'Tariff shocks'

"These 'tariff shocks' heighten economic uncertainty, disrupt global trade, and risk domestic inflation, market distortion, or even global recession," China's ambassador to the WTO, Li Chenggang, said at a closed-door meeting of the global trade body on Tuesday, according to a statement sent to Reuters.

"Worse, the U.S. unilateralism threatens to upend the rules-based multilateral trading system."

U.S. envoy David Bisbee called China's economy a "predatory non-market economic system" in response and accused it of violating and evading WTO rules.

Negotiating tactic

Some delegates said they saw China's intervention as an attempt to show itself supporting WTO rules — a posture that can help China win allies in ongoing global trade negotiations.

Disputes between the two top economies at the WTO long pre-date Trump's arrival. Beijing has accused Washington of breaking rules while Washington says Beijing does not deserve its "developing country" status at the WTO.

The Trump administration has announced plans to withdraw or disengage from other global organizations, but the WTO has not yet been a major focus for the White House.

However, incoming U.S. Trade Representative Jamieson Greer has called the WTO "deeply flawed."

Reuters

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