The World Trade Organisation has said US tariffs on Chinese goods totalling more than 200 billion dollars (£155 billion) are illegal under the rules of the global trade body.
It is the first time the Geneva-based trade body has ruled against a series of tariffs President Donald Trump’s administration has imposed on a number of countries, allies and rivals alike.
Mr Trump has repeatedly criticised the WTO for allegedly treating the US unfairly.
In its decision, the WTO ruled against the Trump administration’s argument that China has engaged in practices harmful to US interests, on issues including intellectual property theft, technology transfer and innovation.
The ruling, in theory, would allow Beijing to impose retaliatory tariffs on billions in US goods – if the process is completed.
But the US government can appeal against the decision announced by the WTO’s dispute settlement body, and the WTO’s appeals court is not currently functioning – largely because of Washington’s single-handed refusal to accept new members for it.