U.S. files complaint against China over auto tariffs
By David Nakamura and Howard Schneider,
MAUMEE, Ohio — The United States filed a complaint against China with the World Trade Organization on Thursday over tariffs on American-made automobile exports.
The action comes as President Obama has pledged to get tougher on China’s trade policies, pressuring Beijing in recent months to curtail currency manipulation and crack down on theft of intellectual property. Republican presidential candidate Mitt Romney has challenged Obama’s record in dealing with a country that enjoys a massive trade surplus with the United States.
The trade complaint was the seventh the administration has brought against Beijing. It drew attention to the fact that America’s Big Three car companies export relatively few vehicles to China, having chosen instead to invest billions of dollars in Chinese auto plants.
Ford exports no cars to China; Chrysler and General Motors ship a few thousand vehicles each from U.S. factories — compared, for example, with the 2.5 million vehicles that GM manufactured and sold from its China-based plants last year.
Still, administration officials said that China should be forced to play by the rules and that the tariffs imposed late last year on U.S.-made cars violate WTO restrictions. The WTO allows a country to impose offsetting tariffs if it concludes that a trading partner is either selling goods at unfair prices, a practice known as dumping, or had subsidized a particular industry, as China alleges was the case with the federal bailouts of GM and Chrysler.
In a briefing with reporters, a top administration official said the Chinese tariffs, some in excess of 20 percent, had been formulated in a “black box,” without the proper evidence or proof that China’s domestic auto industry had been damaged. Instead, the official said, China imposed the duties in retaliation for U.S. taxes imposed on Chinese tires in 2009 — a tariff already upheld by the WTO.
“Just this morning, my administration took a new action to hold China accountable for trade practices that harm American automakers,” Obama said at an appearance in this manufacturing town just south of Toledo, where he kicked off a two-day bus tour of Ohio and Pennsylvania.
The president hopes to rally blue-collar workers in heavily union areas who supported his administration’s bailout of the auto industry three years ago.
“Americans aren’t afraid to compete. I believe in trade,” Obama told the crowd of about 500 outside the Wolcott House Museum. “American workers build better products than everyone else. As long as we play on a fair playing field . . . we’ll do just fine.”
Chinese officials, responding to the U.S. action, said Beijing will “properly handle” the complaint. “It is normal for frictions to occur,” the Associated Press quoted foreign ministry spokesman Liu Weimin as saying at a regular briefing. “What is important is to properly handle it and not to let it impede friendly relations.” The Chinese Commerce Ministry issued a similar statement.
Officials at GM and Chrysler said they had no comment on the WTO action. The United Steelworkers union issued a statement supporting it; business groups, often quick to comment on China-related issues, remained silent on this one.
U.S. and other automakers have invested heavily in China, and the bulk of the cars sold in China are produced there. But luxury vehicles and those with engines of 2.5 liters or more are sometimes built in U.S. plants and exported. The United States sold about 92,000 of those vehicles to China last year, worth about $3 billion, according to the Office of the U.S. Trade Representative.
Schneider reported from Washington. Philip Rucker in Wolfeboro, N.H., contributed to this report.