The World Trade Organization decided Monday to investigate the tariffs Washington slapped on $250 billion worth of Chinese goods, as the two countries prepare to meet for renewed trade talks.
The WTO's Dispute Settlement Body (DSB) has agreed to establish an expert panel to review US President Donald Trump's decision to hit China with tariffs on a quarter of a trillion dollars' worth of goods, according to a Geneva trade official with insight into the case.
The DSB accepted Monday to launch the probe after China filed a second request for its case to be heard.
Under WTO regulations, parties in a dispute can block a first request for the creation of an arbitration panel, but if the parties make a second request, it is all but guaranteed to go through.
China's representative told the assembly Monday that the tariffs imposed last year were "a blatant breach of the United States' obligations under the WTO agreements and is posing a systemic challenge to the multilateral trading system."
The US representative meanwhile slammed the Chinese request for a WTO probe as "entirely hypocritical", pointing to the "discriminatory duties on over USD 100 billion in US exports" imposed by China.
At the same time, the representative added, creating a panel was useless since China "has already taken the unilateral decision that the US measures cannot be justified, and China has already imposed tariff measures on US goods" in retaliation.
The WTO has in recent months created panels to investigate complaints from a long line of countries over Trump's decision to slap them with tariffs of 25 per cent on steel and 10 percent on aluminium.
The news of the fresh WTO probe came as senior US and Chinese officials prepared to meet in Washington this week, hoping to move toward a bargain to end their unprecedented trade war.
Since last year, the world's two largest economies have exchanged tit-for-tat tariffs on more than USD 360 billion in two-way trade, with the largest amount, more than USD 250 billion, imposed by Washington.
At a meeting in Argentina last month, Trump and his Chinese counterpart Xi Jinping agreed to bury the hatchet provisionally -- with Trump delaying a sharp increase on US duties for USD 200 billion in Chinese goods until March 1.
Washington has made its demands clear: China must agree to far-reaching "structural" reforms in its trade practices, curbing massive state intervention in markets and the alleged theft of American technological know-how, including through hacking and the forced transfer of intellectual property.
Trump also wants to cut the soaring US trade deficit with China, which in 2017 hit a record USD 375 billion, not including trade in services.