The United States has formally told the World Trade Organization (WTO) that it opposes granting China market economy status, a position that if upheld would allow Washington to maintain high anti-dumping duties on Chinese goods.
The statement of opposition, made public on Thursday, was submitted as a third-party brief in support of the European Union in a dispute with China that could have major repercussions for the trade body's future.
China is fighting the EU for recognition as a market economy, a designation that would lead to dramatically lower anti-dumping duties on Chinese goods by prohibiting the use of third-country price comparisons.
The U.S. and EU argue that the state's pervasive role in the Chinese economy, including rampant granting of subsidies, mean that domestic prices are deeply distorted and not market-determined.
A victory for China before the WTO would weaken many countries' trade defenses against a flood of cheap Chinese goods, putting the viability of more western industries at risk.
The move comes as trade tensions between Washington and Beijing are increasing as the Trump administration prepares several possible major trade actions, including broad tariffs or quotas on steel and aluminum and an investigation into Chinese intellectual property misappropriation.