U.S. Files W.T.O. Case against China

Amid the U.S. presidential campaign, the Obama administration has filed a W.T.O. case against China over automobile subsidies. From Keith Bradsher at The New York Times:

The W.T.O. case accuses China of providing at least $1 billion worth of subsidies from 2009 to 2011 for exports of autos and auto parts. While China exports virtually no fully assembled cars to the United States, it has rapidly expanded exports to developing countries, and those exports compete to some extent with cars exported or designed in the United States.

[…] Auto parts employment in the United States has dropped by about one-half from 2001 to 2010, as imports from China grew nearly sevenfold over the same period, according to data provided by the senior official, who insisted on anonymity citing an administration policy banning on-the-record comments on a new policy before an official announcement is made. Auto parts manufacturers directly employ 54,200 people in Ohio, and when suppliers like steel makers are included, the auto industry accounts for 850,000 jobs in the state, or 12.4 percent of total employment there.

 

Mark Landler further discusses the delicacy of handling U.S.-China economic ties in an election year. From The New York Times:

It is the latest in a string of trade actions against China taken by the Obama administration, and the second announced by the president on the eve of a campaign visit to Ohio, where the auto parts industry employs 52,400 people. In July – just before he flew to Toledo, home of a Jeep Wrangler factory – the White House filed a complaint against Beijing for levying $3.3 billion in duties on American automobiles.

[…] Mr. Romney fired back even before Mr. Obama spoke, accusing him of doing “too little, too late” to curb China’s unfair trade practices. The latest trade case, Mr. Romney said, was little more than a campaign stunt, failing to compensate for his unwillingness to take other actions, like labeling China a currency manipulator.

[…] Bashing China is a tried-and-true campaign strategy for both parties, particularly in swing states like Ohio, where a heavy loss of manufacturing jobs has coincided with a surge of Chinese-made auto parts into the United States.

 

Meanwhile, China has also taken to the W.T.O to fire back. From Tom Miles and Michael Martina at Reuters:

China filed a complaint at the World Trade Organization on Monday to challenge a new U.S. law on “countervailing duties”, or tariffs intended to combat export-promoting subsidies.

[…]Commerce Ministry spokesman Shen Danyang said China hoped the United States could “correct its mistaken policy and appropriately resolve China’s concerns”.

“China has, under various circumstances, repeatedly reiterated that it resolutely opposes the abuse of trade remedy regulations, opposes trade protectionism, and will staunchly exercise its WTO-member rights to protect the legal rights of its domestic industry,” Shen said.

 

See also a previous W.T.O case against China under the Obama administration, via CDT.