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China Trade Complaint Puts Auto Industry at Center of Dispute – and US Election Battle

Obama, Romney trade jibes.

by on Sep.17, 2012

Chinese Pres. Hu Jintao with Pres. Barack Obama during a less confrontational meeting.

As expected, the U.S. filed a major trade complaint against China today, one that accuses the Asian giant of illegally dumping subsidized auto parts into the U.S. market – a move that has cost potentially tens, even 100s of thousands of U.S. jobs.

The move came just hours after China filed its own complaint with the World Trade Organization over punitive tariffs the Obama Administration had enacted earlier this year to compensate for China’s alleged dumping of tires.  The tariffs cover more than 30 different product categories as diverse as kitchen appliances, chemicals and wind generation towers.

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The conflicting WTO complaints threaten to heat up the growing battle between two major global trading partners. But the issue is also becoming a point of debate between President Barack Obama as he competes for re-election and his Republican challenger Mitt Romney.


Obama Plans New Trade Complaint Against Chinese Car Parts

But China files its own trade complaint.

by on Sep.17, 2012

President Barak Obama during a visit to a GM plant - along with South Korean President Lee Myung-bak.

President Barack Obama is expected to announce that the White House will file a new trade complaint accusing China of dumping cars and car parts into the U.S. market.

The President is expected to detail the new complaint, which will be filed with the World Trade Organization, during a campaign stop in Ohio later today.  The news could shore up his standings in Ohio, a state heavily dependent upon automotive manufacturing.  Obama has come under fire from GOP challenger Mitt Romney for not taking a stronger stand on Chinese trade and intellectual property infractions.

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China actually beat the U.S. to the punch, however, filing its own charges with the WTO. on Monday, alleging that the U.S. has unfairly enacted duties on 30 types of subsidized goods imported from the Asian giant ranging from kitchen appliances to tires to wind towers.


China Will Impose Anti-Dumping Duties on U.S. Cars

Asian giant fires back after U.S. penalizes Chinese-made tires.

by on Dec.15, 2011

Even some German cars made in the U.S., like the Mercedes-Benz M-Class, will be facing duties.

The threat of a trade war appears to be looming large with China’s warning that it plans to impose anti-dumping duties on American automobiles – a  move that could have a particularly harsh impact on General Motors, the largest manufacturer in the booming Chinese auto industry.

But slightly smaller new duties also will be imposed on products exported to China by Chrysler, as well as from U.S. plants operated by BMW and Mercedes-Benz.

The Chinese announcement comes three months after the World Trade Organization (WTO) upheld the U.S. decision to impose duties on Chinese tire imports – and some see the move as a warning to Washington where further actions are under debate to nudge China into letting its currency rise closer to free market levels.

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The new tariffs will affect vehicles with engines larger than 2.5 liters in size, and would range from 2.0% on BMW models and 2.7% on Mercedes, to 12.9% for GM products imported from the U.S. Chrysler would face an 8.8% tariff, according to the Chinese Ministry of Commerce.


China Rules U.S. Carmakers Guilty of Dumping

Beijing decides not to issue penalties.

by on May.10, 2011

A Chevy Volt at the Shanghai Expo. While GM is accused of dumping, new Chinese rules will likely restrict Volt's appeal in that market.

U.S. automakers are receiving unfair subsidies that amount to illegally dumping cars on the Chinese market, Beijing regulators have ruled.

Chinese authorities have decided they will not levy penalties against the American makers cited by the complaint – ostensibly to avoid triggering a new trade dispute between the two countries.  But the timing of the action raises concerns in that American makers have been sounding alarm over new rules they feel might impact their ability to market products in China by unfairly protecting domestic carmakers and suppliers.

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“China’s domestic car industry … has suffered substantial damage,” said a statement from China’s Commerce Ministry, following the completion of an investigation that began in November 2009.

The investigation was launched on behalf of Chinese domestic automakers who complained about U.S. imports – which tripled in value to $3.4 billion between 2009 and 2010.


Deadline Nearing on Chinese Tire Sanctions

Contentious issue puts President between the largest holders of our debt and the ongoing loss of U.S. manufacturing jobs.

by on Sep.08, 2009

The political rubber is about to meet the trade (offs) road.

The political rubber is about to meet the trade (offs) road.

The United Steelworkers (USW) today updated the White House on this year’s sharp spike of “accelerating” Chinese tire imports.

According to preliminary government data for August, there’s been an extraordinary increase of passenger and light truck tire imports into the U.S. of 57% when compared to this year’s first four months leading up to the April petition filing by the USW, which that sought relief under Section 421 of the Trade Act of 1974.

The U.S. International Trade Commission (USITC) said in late June that tariffs should be implemented on the 46 million tires imported annually from China because of the harm done to the U.S. industry.

If the Obama Administration bows to Chinese lobbying pressure, made all the more  potent since China is our largest holder of U.S. government debt, then it will disappoint organized labor, which helped propel it into office.

More is at stake here than just rubber worker jobs. The U.S.  — without a senior level ministry to look after job creation as part of a larger industrial policy – is alone among all other large  trading nations.

“We fear that the ITC’s recommended relief will be inadequate for this huge spike of imports, and that September will be even worse,” said USW President Leo Gerard. Ever since the ITC’s June finding of market disruption, we have watched with alarm as the Chinese have cranked up their exports of tires to beat the date any remedy is applied.”

Section 421 is a safeguard that China agreed to as part of its bilateral trade negotiations with the United States leading to China’s 2001 membership in the World Trade Organization.

Gerard testified last month that China tire imports had swelled in July to more than 42% over the same period from January to April.

Gerard said today, “This is yet another attempt to defeat the beneficial effects of a trade remedy designed to address the market disruption and harm already caused by these imports. The current imports spike from China will hurt U.S. workers further if not addressed in the President’s remedy decision.”


ITC Rules China’s Largest Tire Maker is Illegally Dumping in the U.S. and Killing American Jobs

A crucial test for the Obama Administration on trade policy is coming by the September deadline for Presidential action.

by on Jun.30, 2009

United Steelworkers International President, Leo Gerard

During the last five years, about 5,100 U.S. tire workers lost their jobs.

The U.S. International Trade Commission (USITC) said yesterday it will propose to President Obama that tariffs be implemented by the Administration on the 46 million tires imported annually from China.

The latest action follows the Commission’s June 18th ruling that a market disruption exists, and it is harming U.S. industry.  Simply put, without getting into a meaningless legal definition debate, we interpret this as saying China is dumping tires illegally in the U.S. under international trading rules.

The ITC investigation was prompted by a union complaint from the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW). The USW complaint asking for tariff relief was filed under Word Trade Organization rules that China has agreed to be governed by.

The USW filed a petition with the ITC in April that sought relief under Section 421 of the Trade Act of 1974. Section 421 is a temporary, country-specific safeguard that China agreed to as part of its bilateral trade negotiations with the United States leading to China’s 2001 membership in the World Trade Organization.