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China, US battle over auto parts

By Cong Mu (Global Times)

08:15, September 24, 2012

(Photo/Global Times)

The US government filed a complaint against China with the World Trade Organization (WTO) on Monday, alleging that China has provided illegal subsidies to its automobile and automobile-parts exporters, in 12 designated export bases, according to a press release on the WTO's website.

The US claimed that the subsidies came in the form of "grants, loans, forgone government revenue, the provision of goods and services and other incentives contingent upon export performance," the press release said.

Illegal subsidies were worth $1 billion between 2009 and 2011, Reuters reported Tuesday, citing unnamed US officials.

Meanwhile, China also filed a dispute against the US anti-dumping and countervailing measures on 24 categories of products worth $7.2 billion, including off-the-road (OTR) tires, with the WTO on Monday, according to a statement by the Chinese Ministry of Commerce.

"The US complaint continues from the case of Chinese OTR tire exports to the US last year," Zeng Zhiling, director of LMC Automotive Asia Pacific Forecasting, told the Global Times.

"After the US imposed extra safeguard duties on the imports of the Chinese tires, China implemented special tariffs, up to 21.5 percent, on imports of more than 90,000 US-made vehicles," Zeng said.

China slapped "duties on US auto exports in December 2011 on roughly 92,000 autos and SUVs, worth 20.8 billion yuan ($3.3 billion) in annual US exports," Reuters reported.

"The trade duties cover more than 80 percent of US auto exports to China," Reuters reported.

"I think the [Obama] administration, and the filing, is looking at some very specific policies, many of which are at the municipal level [in China]," James Chao, director of the Asia-Pacific division of IHS Automotive Consulting, told the Global Times.

"The US was unhappy with China over its duties on car exports last year, and, it is retaliating," Zeng said.

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