U.S. files trade complaint against China's auto import tariffs
The United States filed a complaint against China on Thursday with the World Trade Organization for imposing duties on more than $3 billion (18.9 billion yuan) worth of U.S.-made autos, a senior U.S. official said.
The complaint comes as President Barack Obama campaigns in Ohio, an important election battleground state where auto plants have been affected by the duties.
The president's re-election campaign has sought to tie his Republican opponent, Mitt Romney, to the outsourcing of American jobs to China, tapping into public worry over high U.S. unemployment that will be a key factor in the Nov. 6 ballot.
Obama will discuss the trade action during his visit to Ohio, where he begins a two-day campaign bus tour that will end in Pennsylvania, where the threat to manufacturing jobs posed by competition from China also looms large among voter concerns.
"The key principle at stake is that China must play by the rules of the global trading system. When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field," a senior administration official said.
The trade duties cover more than 80 percent of U.S. auto exports to China, including cars manufactured in Toledo and Marysville, Ohio, and Detroit and Lansing, Mich.
"The duties disproportionately fall on General Motors and Chrysler products precisely because of the actions that President Obama took to support the U.S. auto industry during the financial crisis," the official said.
China, the world's biggest car market, announced plans on Dec. 14 to impose anti-dumping duties as high as 12.9 percent on GM vehicles and 8.8 percent for Chrysler vehicles.
Tough on China
The administration has sought to portray itself as tough on China, while taking care not to push too hard against a rival whose cooperation it needs on a number of important fronts, including against Iran over its nuclear program.
The WTO complaint is meant to reinforce that message and counteract criticism from Romney that Obama has not been strict enough when dealing with China.
The president's campaign has also hit Romney hard over reports that Bain Capital, the private equity firm he led, invested in companies that were early adopters of outsourcing business activities to cheap labor markets like China.
GM, Chrysler and the American Automobile Policy Council, which represents the three U.S. automakers, all declined to comment.
The anti-dumping and countervailing duties levied by China on U.S. auto exports cover roughly 92,000 autos and SUVs, worth $3.3 billion in annual U.S. exports.
At the time, China said U.S. taxpayer support of the two automakers amounted to a government subsidy that was illegal under WTO rules, an allegation the Obama administration rejects.
The U.S. government, which provided aid to the companies in 2008 in return for stock, holds a 32 percent stake in GM. It sold its Chrysler holdings to Italy's Fiat S.p.A. a year ago.
The Chinese levies also were applied to vehicles produced by the U.S. units of BMW AG and Daimler AG, which pay 2 percent and 2.7 percent respectively.
Reviving manufacturing
When China imposed the duties, its car sales were rising at the slowest pace in 13 years, putting pressure on domestic producers to consolidate as GM and other foreign carmakers posted gains.
"The auto industry is helping turn our economy around by reviving manufacturing facilities across the nation," Senator Sherrod Brown, an Ohio Democrat, said in a statement today. "We're at risk of this progress being undercut if we allow China to continue to cheat and break trade laws."
Senator Rob Portman, an Ohio Republican and possible running mate of Romney's, joined Brown in December asking Kirk to investigate China's duties on autos. Kirk was asked to use "all available tools" to insist China competes fairly, Portman and Brown wrote in a Dec. 19 letter.
The combined duties amounted to 15 percent on Chrysler's Jeep Wrangler produced in Toledo, Ohio and the Jeep Grand Cherokee produced in Detroit, Mich.
They were even an steeper 21.8 percent on GM's Buick Enclave and Cadillac CTS, produced in Lansing, Mich.
Foreign car makers who build autos in the United States were also hit, including Honda's Acura TL, produced in Marysville, Ohio, which was hit with a 4.1 percent duty.
Today's request for consultations is the first step in WTO dispute proceedings and means the governments must now hold talks for at least two months in a bid to resolve the dispute. If the talks fail, the U.S. can ask WTO judges to rule.
The president's re-election campaign has sought to tie his Republican opponent, Mitt Romney, to the outsourcing of American jobs to China, tapping into public worry over high U.S. unemployment that will be a key factor in the Nov. 6 ballot.
Obama will discuss the trade action during his visit to Ohio, where he begins a two-day campaign bus tour that will end in Pennsylvania, where the threat to manufacturing jobs posed by competition from China also looms large among voter concerns.
"The key principle at stake is that China must play by the rules of the global trading system. When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field," a senior administration official said.
The trade duties cover more than 80 percent of U.S. auto exports to China, including cars manufactured in Toledo and Marysville, Ohio, and Detroit and Lansing, Mich.
"The duties disproportionately fall on General Motors and Chrysler products precisely because of the actions that President Obama took to support the U.S. auto industry during the financial crisis," the official said.
China, the world's biggest car market, announced plans on Dec. 14 to impose anti-dumping duties as high as 12.9 percent on GM vehicles and 8.8 percent for Chrysler vehicles.
Tough on China
The administration has sought to portray itself as tough on China, while taking care not to push too hard against a rival whose cooperation it needs on a number of important fronts, including against Iran over its nuclear program.
The WTO complaint is meant to reinforce that message and counteract criticism from Romney that Obama has not been strict enough when dealing with China.
The president's campaign has also hit Romney hard over reports that Bain Capital, the private equity firm he led, invested in companies that were early adopters of outsourcing business activities to cheap labor markets like China.
GM, Chrysler and the American Automobile Policy Council, which represents the three U.S. automakers, all declined to comment.
The anti-dumping and countervailing duties levied by China on U.S. auto exports cover roughly 92,000 autos and SUVs, worth $3.3 billion in annual U.S. exports.
At the time, China said U.S. taxpayer support of the two automakers amounted to a government subsidy that was illegal under WTO rules, an allegation the Obama administration rejects.
The U.S. government, which provided aid to the companies in 2008 in return for stock, holds a 32 percent stake in GM. It sold its Chrysler holdings to Italy's Fiat S.p.A. a year ago.
The Chinese levies also were applied to vehicles produced by the U.S. units of BMW AG and Daimler AG, which pay 2 percent and 2.7 percent respectively.
Reviving manufacturing
When China imposed the duties, its car sales were rising at the slowest pace in 13 years, putting pressure on domestic producers to consolidate as GM and other foreign carmakers posted gains.
"The auto industry is helping turn our economy around by reviving manufacturing facilities across the nation," Senator Sherrod Brown, an Ohio Democrat, said in a statement today. "We're at risk of this progress being undercut if we allow China to continue to cheat and break trade laws."
Senator Rob Portman, an Ohio Republican and possible running mate of Romney's, joined Brown in December asking Kirk to investigate China's duties on autos. Kirk was asked to use "all available tools" to insist China competes fairly, Portman and Brown wrote in a Dec. 19 letter.
The combined duties amounted to 15 percent on Chrysler's Jeep Wrangler produced in Toledo, Ohio and the Jeep Grand Cherokee produced in Detroit, Mich.
They were even an steeper 21.8 percent on GM's Buick Enclave and Cadillac CTS, produced in Lansing, Mich.
Foreign car makers who build autos in the United States were also hit, including Honda's Acura TL, produced in Marysville, Ohio, which was hit with a 4.1 percent duty.
Today's request for consultations is the first step in WTO dispute proceedings and means the governments must now hold talks for at least two months in a bid to resolve the dispute. If the talks fail, the U.S. can ask WTO judges to rule.
