President Donald Trump on Friday (local time) threatened to "use all available means" to secure changes to a provision at the World Trade Organisation (WTO) that allows countries, including China, to decide whether they qualify as "developing countries."
Countries that claim the label as developing nations -- which includes nearly two-thirds of the organisation's 164 members -- qualify for certain preferential treatment, like longer time horizons to carry out trade agreements.
The Trump administration argues that dozens of countries abuse those rules and has singled out China, the world's second-largest economy and the largest global exporter for about a decade, saying it should not be classified as a developing nation, The New York Times reported.
Administration officials have defended Trump's decision by stressing that China claims easier treatment at the global trade body while pumping out low-priced manufactured goods that have displaced American jobs and is moving to dominate the high-tech industries of the future, like autonomous vehicles and robotics.
"The United States has never accepted China's claim to developing country status, and virtually every current economic indicator belies China's claim," the proclamation read.
On Twitter on Friday, Trump called the WTO 'broken' and said it was allowing other countries to take advantage of the United States.
"The WTO is BROKEN when the world's RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment," he said.
"NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!" he said.
The administration said that if the US Trade Representative concluded that substantial progress had not been made toward overhauling the organisation's rules in 90 days, it would no longer treat countries that it did not consider to be developing nations as such.
However, it is not clear what the practical effect of those changes would be -- for example, whether the Trump administration would block current negotiations at the WTO where countries like China claim developing country status.
The Office of the US Trade Representative is yet to respond on the matter.
The new announcement is part of a broader offensive on the WTO by the Trump administration, which argues that the group has failed to check China's unfair economic behaviour and is in desperate need of change.