July 5, 2012

U.S. to seek trade action against China on autos

The United States is looking for the World Trade Organization's help in fighting Chinese tariffs on U.S.-made automobiles.

The Obama administration said Thursday that it will announce the launch of an enforcement action with the WTO, labeling the tariffs on more than $3 billion worth of autos as unfair.

Initiated late last year by the Chinese government, the tariffs raised the cost of U.S.-made vehicles to Chinese buyers by between 2% and 21%. China's Commerce Ministry cited "anti-dumping and anti-subsidiary regulations" for initiating the duties.

The administration says imposition of the duties violates China's promise to abide by international trade agreements when it joined the WTO. The duties cover more than 80% of U.S. auto exports to China.

"The Obama administration will continue to fight to ensure that China does not misuse its trade laws and violate its international trade commitments to block exports of American-made products," U.S. Trade Representative Ron Kirk said in a statement.

A White House statement said the duties fell particularly hard on General Motors and Chrysler because of the government assistance they received during the 2009 bailout. The third of the Big Three automakers, Ford Motor, did not receive assistance.

But the tariffs did not affect vehicles made by U.S. joint ventures in China. General Motors has said that U.S.-made vehicles amount to less than 1% of its total sales in the country.

As a result, the tariffs have had little impact on GM's sales in China. In May, the most recent sales month available, GM said it and its venture partners sold 231,183 vehicles, up 21.3% from May of last year.

So far this year, GM has sold a record 1.2 million vehicles in China, about 137,000 more than it sold in the United States over the same period.

Ford joint ventures have sold nearly 225,000 vehicles in China so far this year. Figures for Chrysler were not immediately available.

President Obama on Thursday began a two-day trip through Ohio and Pennsylvania, where he touted his rescue of the auto industry.

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