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US accuses China of unfair auto trade practices

Asks world trade group to rule on $3b in tariffs

WASHINGTON — The United States launched a trade complaint Thursday against China at the World Trade Organization, accusing Beijing of unfairly imposing duties on more than $3 billion in exports of American-produced automobiles.

The announcement came as President Obama hit the campaign trail in the battleground state of Ohio, where automakers have been affected by the tariffs imposed in December. It underscored how America’s trade relations with rising economic power China could color the political debate ahead of the November presidential election.

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Under World Trade Organization rules, countries are allowed to impose punitive tariffs to offset damage from both subsidies and dumping — selling products at below market value — but the United States contends that in this and other cases, China has used those remedy measures in an unfair and retaliatory way to hurt American exporters.

Last month, the United States successfully challenged Chinese tariffs imposed on American high-technology steel products and also disputed tariffs levied on chicken products.

White House spokesman Jay Carney said the Chinese duties cover more than 80 percent of US auto exports to China and fall disproportionately on General Motors and Chrysler because of the actions Obama took to support the auto industry during the financial crisis.

Some critics have contended that the administration’s bailout of the auto sector — which has seen a return to profitability even as wider economic recovery has stuttered — could leave US products vulnerable to countervailing duties by global competitors claiming it amounted to an unfair subsidy.

China’s antidumping and countervailing duties, imposed on autos for two years and ranging from 2 percent to 21.5 percent, affect cars and sport utuility vehicles with engine capacity of 2.5 liters or larger.

A senior US trade official, briefing reporters on condition of anonymity, said that in 2011 an estimated 92,000 of such autos were exported to China.

US trade representative Ron Kirk said the United States has requested consultations on the issue at the World Trade Organization, the first step in raising a dispute at the international trade body. If the two sides fail to resolve the issue through consultation within 60 days, the United States could request a trade dispute panel. A ruling in such a case could take between 18 months and two years.

Kirk said in a statement that it was the latest in a series of enforcement steps by the administration “to hold China accountable for its WTO commitments.”

The administration said China initiated its probe into the US auto imports — leading to the imposition of the tariffs — shortly after Obama’s decision in September 2009 to impose a tariff on US imports of low-grade Chinese tires that was upheld by the world trade body.

Chrysler said it exported 38,373 vehicles to China last year. Chrysler exports more vehicles from the United States than other automakers because it does not have a plant in China. By contrast, GM and its Chinese partners operate 11 plants in China, and GM makes the vast majority of the 2.5 million vehicles it sells in China in the country. It exports limited numbers of the Chevrolet Volt, Buick Encore, and Cadillac CTS from the United States, spokesman Klaus-Peter Martin said.

China and the United States are at odds over a slew of trade issues. In March, the United States, the European Union, and Japan brought a trade case against China over its curtailment of exports of rare earth minerals over whose production China has a virtual monopoly. Those minerals are used to manufacture hybrid car batteries, flat-screen televisions, and other high-tech goods. China said curbing rare earth exports is for environmental protection, not intended to help Chinese companies.

With American manufacturers still struggling to recover from the financial crisis, and unemployment running over 8 percent, the administration is keen to show it is getting tough on discriminatory trade practices by its chief economic rival — also its main foreign creditor — blamed by many in the United States for a loss of American manufacturing jobs.

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