U.S. Wins Trade Case Against Chinese Duties on American Autos

WASHINGTON (Los Angeles Times/MCT) —

On Friday, the United States won an international trade case against China for duties placed on imports of American automobiles, a victory that Obama administration officials hoped would prevent Beijing from enacting discriminatory taxes in the future.

China had removed the duties last year as the U.S. pressed its case with the World Trade Organization.

The duties, which ranged from 2 percent to 21.5 percent, were placed on large American-made cars and sport utility vehicles starting in 2011 and last year affected about two-thirds of the $8.5 billion worth of U.S. auto exports to China, administration officials said.

China is the second-largest foreign market for U.S. automakers.

“This is the third time that the United States has prevailed in a WTO dispute challenging China’s unjustified use of trade remedies,” said U.S. Trade Representative Michael Froman. “The message is clear: China must follow the rules, just like other WTO members.”

The other recent cases involved disputes over specialty steel and chicken broiler products.

The Chinese Embassy in Washington could not be reached for comment.

China enacted the anti-dumping and countervailing duties after it said that imported American vehicles had been sold below fair-market value and had benefited from U.S. subsidies, such as the bailouts of General Motors and Chrysler.

But U.S. officials argued that the duties were imposed in retaliation for the U.S. imposition in 2009 of anti-dumping tariffs of as much as 35 percent on Chinese tires that had flooded the American market. The WTO backed the U.S. move in that dispute.

In the latest case, U.S. trade officials said Beijing was unable to show that any U.S. auto subsidies harmed the Chinese auto industry.

On Friday, a WTO panel largely sided with the U.S. and recommended China bring its policies in compliance with anti-dumping rules.

U.S. officials said the Chinese duties affected vehicles manufactured in California and nine other states. The duties were applied to cars and SUVs with an engine capacity greater than 2.5 liters.

In 2013, $5.1 billion of those vehicles were exported to China. Senior U.S. trade representative officials did not have an estimate of the effect of the duties on American sales in China from 2011 to 2013.

Two key Democratic lawmakers from Michigan, home to GM, Chrysler and Ford, joined Froman for the announcement at a Washington news conference and praised the ruling.

Rep. Sander Levin said it was an important victory for all U.S. manufacturers, because it told China it needed to comply with WTO rules.

Sen. Debbie Stabenow commended the Obama administration for aggressively going after China for “illegal and improper activities.”

“In the global economy, we have to have a level playing field in order to be able to export and in order to be able to compete in a fair way,” she said. “And if we have a level playing field, we win.”

Some Republicans from auto-industry states also cheered the WTO decision.

“China remains a vital export market for American goods and services, but China must follow global trade rules, and when they don’t, we’ll hold them accountable every time,” said Sen. Rob Portman, R-Ohio, a former U.S. trade representative.



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