• Rate this Story
  • 0
  • 0

By Mark Felsenthal and Tom Miles | September 17, 2012 11:14 PM EST

China filed a trade complaint on Monday to challenge a new U.S. law allowing duties on subsidized goods from China in a tit-for-tat exchange with the United States after Washington said it would launch a complaint against Beijing's support for car exports.

The two cases could shift the focus to President Barack Obama's management of the sometimes contentious U.S. relationship with China and his support for the auto industry in the final weeks before a close election.

Beijing's complaint to the World Trade Organization about "countervailing duties", or tariffs intended to combat export-promoting subsidies, came a few hours after the White House said it would launch a trade complaint against China over what it says is Beijing's unfair backing of its auto industry.

China's complaint potentially affects close to 30 products that have previously been targeted by U.S. duties, a trade official familiar with the case said.

In a brief statement, the WTO said the products included steel, tires, magnets, chemicals, kitchen appliances, wood flooring and wind towers.

In March, the U.S. House of Representatives had voted to ensure the United States can impose duties on subsidized goods from China and Vietnam, a move the White House said was needed to protect American jobs. Obama has signed the bill.

China's Commerce Ministry hit out against the United States on Monday for targeting China with anti-subsidy duties.

"China hopes that the United States can correct its mistaken policy and appropriately resolve China's concerns through WTO dispute resolution mechanisms and consultations," Commerce Ministry spokesman Shen Danyang said in a statement.

The Commerce Ministry made no mention of the U.S. decision to initiate a case against China at the WTO over allegedly illegal subsidies for automobiles and auto parts.

ELECTION ISSUE

Obama will announce his country's WTO complaint during a campaign tour of Ohio, a White House official said on Sunday.

The move allows Obama to take a stand on China and advance the interests of a major job-providing industry in a state that could tip the balance in a tight election. His opponent, Mitt Romney, has attacked Obama for what he says is an overly cautious approach to pressuring China into observing international norms for trade, foreign exchange, and patents and trademarks.

Ohio relies heavily on the auto industry and is a politically important swing state.

"The key principle at stake is that China must play by the rules of the global trading system," the official said. "When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field."

Obama has said Beijing is abusing trade laws by imposing more than $3 billion in duties on U.S. auto exports. In addition to launching the subsidies case, the president is taking the next formal step in the World Trade Organization to protest those duties, the official said.

The trade enforcement steps come as Obama and Romney vie for a few important states, including Ohio, that could determine the outcome of the November 6 presidential election. Obama holds a narrow lead in polls, but the sluggish economy and unemployment rate have weighed on the president's re-election bid.

In recent days, Obama's handling of foreign affairs has jumped to the forefront of the campaign debate as tensions boil over in the Middle East.

Romney has accused Obama of making too many concessions to the Asian powerhouse and has promised to be tougher on issues such as trade and currency manipulation. The Obama campaign has frequently stated that, during his business career, Romney was responsible for sending many U.S. jobs overseas, including to China.

The WTO is unlikely to make a ruling on the two cases before the U.S. presidential election in November.

(Additional reporting by Michael Martina in Beijing; Jeff Mason and Mark Felsenthal in the United States; Editing by Jeremy Laurence)

  • Rate this Story
  • 0
  • 0
Copyright 2012 Thomson Reuters. All rights reserved.

Join the Conversation

IBTimes TV

E-Newsletters

We value your privacy. Your email address will not be shared.