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Obama to fight China tariffs on cars
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TOLEDO, Ohio -- Demonstrating a tough line on trade with China, the Obama administration will file an unfair trade complaint today against China's new duties on some American-made cars and SUVs, including the Toledo, Ohio-made Jeep Wrangler.
A senior administration official told The (Toledo) Blade on Wednesday the U.S. will file the case with the World Trade Organization in Geneva, accusing China of putting illegal duties on $3.3 billion worth of U.S.-made auto imports.
President Barack Obama is expected to refer to the WTO trade action in his speech today in suburban Toledo as he begins his two-day "Betting On America Bus Tour" through northern Ohio and Western Pennsylvania as the Democratic incumbent seeks re-election this fall.
The enforcement action aims to force China to rescind the duties it placed disproportionately on General Motors Co. and Chrysler Group LLC imports because of the 2009 taxpayer rescue of the auto industry.
The enforcement action ties in with the president's campaign message that his administration went to bat for workers in the auto industry in early 2009 to save as many as 1 million auto and auto-parts jobs that could have been lost in bankruptcy liquidation of the two companies.
Since Chrysler and GM emerged from bankruptcy in June 2009, the American auto industry has added 233,700 jobs, the Obama administration said.
Republican challenger Mitt Romney, a native of Michigan and the former governor of Massachusetts, said the free market, aided by government guarantees for post-bankruptcy financing, should have determined the future of GM and Chrysler, an argument he made in a 2008 New York Times editorial headlined "Let Detroit Go Bankrupt."
China in December imposed anti-dumping and countervailing duties on certain SUVs claiming that U.S. taxpayer support of the two automakers amounted to a government subsidy that was illegal under WTO rules, a claim the Obama administration disputes.
The duties cover more than 80 percent of U.S. auto exports to China, or about 92,000 vehicles. They add 15 percent to the price of an imported Jeep Wrangler or Detroit-made Jeep Grand Cherokee, 21.8 percent to a Buick Enclave and Cadillac CTS produced in Lansing, Mich., and 4.1 percent to an Acura TL sedan made by Honda of America Manufacturing Inc. in Marysville, Ohio.
The complaint argues that China is abusing its rights under the WTO to impose anti-dumping and countervailing duties. Under WTO rules, consultations are the first step in a dispute. If parties do not resolve the dispute within 60 days, the complainant may request a WTO dispute settlement panel.
The Obama administration has previously brought allegations of illegal duties against China on behalf of U.S. steel and chicken products.
It has brought trade actions against imports of Chinese passenger and light truck tires. And the United States has brought actions against China's export restraints on rare earth minerals used in manufacturing, restrictions on electronic payment services, and subsidies to China's wind power equipment sector.
In May, the Obama administration moved to place a 31 percent tariff on solar panels made in China, saying Chinese producers had dumped solar cells and panels in the United States for less than it cost to manufacture and ship them. The Toledo area is a center for research and manufacturing solar panels.
The administration says it is trying to make sure China complies with the rules to which it agreed when it joined the WTO in 2001. Those commitments include maintaining open markets on a nondiscriminatory basis and following internationally agreed procedures in a transparent way.
China announced its duties on U.S.-made SUVs after Mr. Obama decided in September 2009 to impose a "safeguard" against imported Chinese tires.
In May 2011, China's Ministry of Commerce determined that imports of American-made automobiles had been sold at less than fair value, or "dumped," into the Chinese market and that they were subsidized by the U.S. government. China began imposing the anti-dumping and countervailing duties on imports of American-produced automobiles and SUVs with an engine capacity of 2.5 liters or larger in December.
China also named Mercedes-Benz U.S. International Inc. and BMW's factory in Spartanburg, S.C., as affected by its new duties.
The U.S. contends that China imposed the duties without sufficient evidence of wrongdoing and made unsupported findings of injury to China's domestic industry.
The president says his administration has filed trade enforcement complaints against China at about twice the rate of his predecessor, Republican George W. Bush.
The fact-checking organization PolitiFact agreed that the Obama administration had brought six cases against China before the WTO in less than one term -- now seven cases, while the Bush administration brought seven cases over two full terms.
PolitiFact rated the claim "half-true" because it found that the first two years of the Bush administration were a honeymoon for China which was newly admitted to the WTO, that trade complaints are more likely to be brought during tough economic times, and the Obama administration's first complaint was in the pipeline when he took office.
The Obama and Romney campaigns have traded China-related attacks in their recent TV ads.
The Obama campaign charged that "Romney's never stood up to China. All he's ever done is send them our jobs," building on allegations that Mr. Romney's former business, Bain Capital, invested in companies that outsourced jobs.
The Romney campaign claims that Mr. Obama has failed to keep up with Europe and China in reaching trade agreements with other countries. Mr. Romney also contends that Mr. Obama has allowed China to build up its own economy by "misappropriating Western technology, blocking access to its market and manipulating its currency."
U.S. Sens. Sherrod Brown, D-Ohio, and Rob Portman, R-Ohio, in December jointly wrote a letter urging the administration to oppose the new Chinese duties. They said the tariffs unfairly impose burdens on Ohio-made vehicles. The letter noted that more than $2.2 billion of Ohio goods were exported to China 2010.
The president is set to arrive at Toledo Express Airport and travel by bus to the Wolcott House Museum Complex in Maumee for an 11:15 a.m. program.
That will be the first stop on a trip that will also take him to Sandusky at 3:40 p.m. and to suburban Cleveland in the evening. The bus trip resumes Friday with a morning stop in Poland, Ohio, near Youngstown, and ending at Carnegie Mellon University in Pittsburgh.
First Published July 5, 2012 12:00 am
