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Obama launching new trade case against China

Claims illegal subsidies of autos and auto parts; EU also probing solar panels.


September 17, 2012
by ASSOCIATED PRESS

WASHINGTON — President Barack Obama will launch a new trade enforcement case against China, using the power of incumbency to counter Republican Mitt Romney’s criticism that he is ceding American jobs to the Asian power.

Senior administration officials said the president will announce the new case, targeting Chinese subsidies for exports of automobiles and automobile parts, Sept. 17 during a campaign trip to Ohio. The swing state has a large manufacturing base where many blame China for depressing its industry.

Romney has accused Obama of being weak on China to the detriment of US workers.

The president countered with claims that Romney has investments in Chinese companies and outsourced jobs to China while running the private equity firm Bain Capital.

Officials said the administration will launch enforcement action at the World Trade Organization because it says China is illegally subsidizing exports in their autos and auto parts sectors. The US says the practice puts American parts manufacturers at a competitive disadvantage and encourages the outsourcing of production to China.

The officials requested anonymity because they were not authorized to discuss the trade action publicly ahead of the president.

The administration is taking the issue to the WTO because its attempts to get China to address the subsidies on its own have been unsuccessful, the officials said.

Jobs in the US auto parts sector dropped by roughly half between 2001 and 2010, while US imports of auto parts from China have increased seven-fold, according to the Obama administration.

The administration is also escalating another case it brought against China at the WTO in July that accuses China of imposing unfair duties on more than $3 billion in exports of US autos. The duties cover more than 80% of American auto exports to China, said the officials.

The cases stem from the Interagency Trade Enforcement Center Obama set up earlier this year to target unfair practices around the world, particularly in China.

Meanwhile, German Chancellor Angela Merkel says she’s hopeful of negotiating a solution to a dispute with China over solar panels, even after the European Union launched an anti-dumping probe.

Rivals accuse China, the world’s largest producer of solar panels, of selling products at a loss to put competitors out of business. The EU acted earlier this month following a complaint by a group of 25 producers of solar gear, including companies from Germany, Italy and Spain.

The EU investigation is expected to last 15 months, but if there is strong early evidence of dumping it is possible to impose temporary duties within nine months.