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Obama administration files new trade complaint against China

The filing is aimed at lifting tariffs that Beijing slapped on many large U.S.-made cars and SUVs last year. It comes amid charges from Mitt Romney that the president isn't tough enough on China.

July 05, 2012|By Jim Puzzanghera and Christi Parsons, Los Angeles Times
  • President Obama greets supporters after a campaign event in Maumee, Ohio, where one of the vehicles hit by a Chinese tariff last year — Chrysler Group’s Jeep Wrangler — is assembled.
President Obama greets supporters after a campaign event in Maumee, Ohio,… (Chip Somodevilla, Getty…)

WASHINGTON — — The Obama administration ratcheted up trade tensions with China, filing an international complaint against tariffs that Beijing slapped on many large U.S.-made cars and sport utility vehicles late last year.

The announcement came Thursday as President Obama launched a two-day bus tour in the suburbs of Toledo, Ohio, where one of the vehicles hit by the duties — Chrysler Group's Jeep Wrangler — is assembled.

It was the second complaint the U.S. has filed against China this year amid charges from Republican presidential candidate Mitt Romney that Obama hasn't been tough enough on the Chinese.

Speaking at a rally in Maumee, Ohio, Obama said his administration has brought trade cases against China at a faster pace than his predecessor, RepublicanGeorge W. Bush.

The new complaint against the auto tariffs filed with the World Trade Organization was intended "to hold China accountable for unfair trade practices that harm American automakers," Obama said.

"As long as we're competing on a fair playing field instead of an unfair playing field, we'll do just fine," Obama said. "But we're going to make sure that competition is fair."

The duties of as much as 22% affect about 90,000 U.S.-made vehicles exported annually to China, totaling about $3.3 billion in sales, the administration said.

The duties disproportionately affectGeneral Motors Co.and Chrysler because China found that the bailouts of those companies starting in 2008 constituted federal subsidies and that U.S. automakers sold exported American-made vehicles at below fair-market value. The U.S. has disputed the findings, which China made in May 2011.

GM and Chrysler declined to comment Thursday.

Most cars sold in China by U.S. automakers are built there in joint ventures with Chinese companies, not imported, said Jeremy Anwyl, vice chairman of auto information company Edmunds.com. So the duties China put in place in December have had little effect on the U.S. auto industry — other than to increase trade tensions in an election year, he said.

"It's the biggest car market in the world; 90,000 is not even a drop in the market," Anwyl said. "This is an example of being tough on China."

But Romney's campaign said Obama has failed to deliver on his tough talk on China.

"After 31/2 years, the manufacturing sector is still hurting and China continues to play by its own set of rules," said Andrea Saul, a Romney spokeswoman. "On Day One, Mitt Romney will stand up to China and fight to protect American businesses and jobs."

Thursday's move by the administration escalates a nearly three-year battle over auto-related duties with China that began when the U.S. put steep duties on imports of Chinese-made tires.

The new duties affect SUVs and large cars such as the Cadillac CTS that have an engine capacity greater than 2.5 liters. The U.S. has challenged the Chinese findings that American automakers were dumping vehicles in that market, saying claims of harm to the Chinese auto industry were unsupported.

The WTO complaint requests dispute settlement consultations with China. If the U.S. and China can't resolve the dispute within 60 days, either side can request a formal WTO resolution.

"As we have made clear, 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 Thursday.

In March, the administration filed a WTO complaint against China to force it to lift export restrictions on rare earth minerals.

The announcement of the new complaint came as Obama campaigned in Ohio, home to thousands of autoworkers and a key battleground in November's presidential election.

The Toledo Blade newspaper broke the story of the unfair trade complaint in Thursday's editions. And at the Maumee rally, former Ohio Gov. Ted Strickland, a Democrat, told the crowd that Obama was fighting for American workers.

When people ask why they should vote for Obama, Strickland said, "You hold up the Toledo Blade and you tell them, 'It is this president who is on our side.' "

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jim.puzzanghera@latimes.com

christi.parsons@latimes.com

Parsons reported from Maumee, Ohio

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