The World Trade Organization on Friday sided with the United States in a major case against China for unfair trade practices against imports of U.S. automobiles.
A WTO dispute settlement panel agreed with the United States that China’s imposition of antidumping duties and countervailing duties on American-made cars and sport-utility vehicles breached numerous international trade rules.
“Once again, the United States has prevailed in a dispute concerning China’s unjustified use of trade remedies, this time on exports of U.S.-made cars and SUVs,” said U.S. Trade Representative Michael Froman in a statement.
“This is the third time that the United States has prevailed in a WTO dispute challenging China’s unjustified use of trade remedies. Each time, a WTO panel of experts has made clear that China had no basis whatsoever for imposing duties on American goods,” he added. The other WTO disputes involved U.S. specialty steel and chicken broiler products.
“The United States will not shy away from enforcing U.S. trade laws, and we certainly won’t tolerate the intimidation that China demonstrated in starting the investigation challenged in this dispute,” warned Rep. Sandy Levin, D-Mich., in a statement.
In 2013, the United States exported $64.9 billion of autos, with $8.5 billion of those exports, or 13 percent of the total, going to China. China is now the second-largest export market for U.S. autos, after Canada, according to the Office of the U.S. Trade Representative. China’s duties, which ranged up to 21.5 percent, affected an estimated $5.1 billion worth of U.S. auto exports in 2013, and were applied to well-known models such as the Jeep Grand Cherokee, Buick Enclave, Cadillac Escalade and many others.
Shortly after President Barack Obama imposed a safeguard measure against Chinese tire imports in September 2009, China’s Ministry of Commerce announced that it would initiate antidumping and countervailing duty investigations of imports of American-made cars and SUVs. In May 2011, the ministry issued final determinations in which it found that imports of American-made automobiles had been sold at less than fair value into the Chinese market and had also benefited from subsidies. In December 2011, China began imposing both antidumping and countervailing duties on imports of American-made automobiles. The antidumping duties ranged from 2 percent to 21.5 percent, while the countervailing duties ranged from 6.2 percent to 12.9 percent. The specific products affected by the duties are American-made cars and SUVs with an engine capacity of 2.5 liters or larger.
On July 5, 2012, the United States requested dispute settlement consultations with China concerning the conduct and results of the Ministry of Commerce’s antidumping and countervailing investigations. After consultations proved unsuccessful, the United States requested that the WTO create a panel to hear U.S. claims that China breached numerous procedural and substantive obligations under the WTO’s Antidumping Agreement and Agreement on Subsidies and Countervailing Measures.
U.S. wins WTO auto trade case against China
