BEIJING — The United States on Monday filed a broad trade case against China at the World Trade Organization, alleging unfair subsidies for exports of cars and auto parts.
Hours after news of the American move began to circulate, but before the trade case was actually filed in Beijing, China’s commerce ministry announced in a statement on its website that it was filing its own WTO case against the United States, alleging unfairness in how the United States calculates the penalty tariffs in anti-subsidy cases.
“Export subsidies are prohibited under WTO rules because they are unfair and severely distort international trade,” U.S. Trade Representative Ron Kirk said in a statement.
The subsidies to auto-parts makers were provided through “dozens of Chinese legal instruments,” including cash grants and preferential loan terms.
Hours after news of the American move began to circulate, but before the trade case was actually filed in Beijing, China’s commerce ministry announced in a statement on its website that it was filing its own WTO case against the United States, alleging unfairness in how the United States calculates the penalty tariffs in anti-subsidy cases.
The Chinese action appeared to be coincidental, as the Chinese government seldom responds quickly to trade actions — indeed, the Chinese commerce ministry statement made no mention of the American action
President Barack Obama immediately used the issue as a wedge against Republican challenger Mitt Romney, who responded quickly and dismissively. Obama “may think that announcing new trade cases less than two months from Election Day will distract from his record, but the American businesses and workers struggling on an uneven playing field know better,” the Republican said.
In its WTO filing, the United States accuses China of providing at least $1 billion worth of subsidies from 2009 to 2011 for worldwide exports of cars and auto parts. While $1 billion may sound like a large number, Chinese exports of automobiles and auto parts totaled $56 billion during this period, according to Chinese customs data.
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 from or designed in the United States.
The Chinese case cites a long-running legal battle waged by importers in U.S. courts over whether the Commerce Department’s methodology in calculating anti-subsidy tariffs results in double-counting for nonmarket economies like China’s when imports from the same country are also subject to anti-dumping tariffs.
