U.S. wins W.T.O. ruling on illegal Chinese duties on auto imports

U.S. wins a W.T.O. ruling that said China's imposition of duties on large engine vehicles was against international trade rules.
By Ananth Baliga   |   May 23, 2014 at 2:56 PM
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WASHINGTON, May 23 (UPI) -- The World Trade Organization ruled in favor of the U.S. Friday saying that the duties imposed by China on the import of American cars was against trade rules.

The W.T.O. panel spent a year poring over legal briefs presented by both countries and sided with the U.S., which had complained about the Chinese commerce ministry's anti-dumping and anti-subsidy tariffs on large-engine family vehicles. The Chinese have already lifted the tariffs but the U.S. still applauded the ruling as a major victory.

"This is a significant victory," U.S. Trade Representative Michael Froman is quoted as saying. "It's time for China to change the practices that have led the United States and our trading partners to bring these kinds of cases."

Froman said that the tariffs affected about $5 billion in automobile exports, and it was an important victory for American auto workers and their families.

Beijing argued that the taxpayer-funded bankruptcies of GM and Chrysler had the effect of providing subsidies to the exports for these manufacturers.

China has long attempted to protect its domestic auto industry requiring foreign companies to partner with local companies to produce cars that will keep out imports. the W.T.O. said that China did not prove that the import of large-engine vehicles was affecting its local industry. The panel also found fault with Beijing's calculation that car makers with factories in the U.S. were underpricing their cars.

"China has had 14 years -- 14 years -- to start playing by the rules," said Senator Debbie Stabenow, a Michigan Democrat, at a news conference in Washington. "But instead we see illegal and improper activities over and over again. As long as China keeps up this illegal behavior, we can and must respond with these kinds of strong enforcement actions."

This victory is the latest in series of ruling that have gone against China. A separate W.T.O. panel is looking at whether China has subsidized exports of cars and particularly car parts to the United States.

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