President Barack Obama on Monday said the United States was challenging Chinese auto and auto-parts subsidies that threatened American jobs as he campaigned in Ohio, an auto manufacturing state that could be decisive in the November presidential election. Beijing fired back with a complaint against US duties on many Chinese exports, in the latest sign of trade tension between the world's two largest economies.
The US case filed at the World Trade Organisation targets what Washington said were "extensive subsidies" to Chinese auto and auto-parts producers located in designated regions, known as export bases. "These are subsidies that directly harm working men and women on the assembly lines in Ohio and Michigan and across the Midwest," Obama told a campaign rally. "We are going to stop it. It is not right, it is against the rules, and we will not let it stand." Republican presidential nominee Mitt Romney, who has accused Obama of not being tough enough with Beijing on trade, and other Republicans criticised the move by the Democratic White House as a blatant effort to sway votes in an important battleground state.
"Campaign-season trade cases may sound good on the stump, but it is too little, too late for American businesses and middle-class families," Romney said in a statement. This was the second time in recent months that Obama has announced a trade action against China while in Ohio. This year, the United States has also pursued anti-dumping and countervailing duty cases against Chinese-made solar panels and wind turbine towers in response to industry petitions.
The new case follows pleas from US steelworkers and other union groups for action to stop what they said was a flood of unfairly subsidised Chinese auto parts. The Obama administration said the targeted export bases made at least $1 billion in subsidies available to auto and auto-parts exporters in China during the years 2009 through 2011.
United Steelworkers President Leo Gerard, whose union represents about 350,000 workers who make tires, windshields, steel, plastic and other products that could be used for autos, hailed the administration's action. "The president's actions made all the difference in stabilising the auto assembly sector," Gerard said, referring to the US government's bailout of the auto industry, which Romney had opposed.
"Today, the president is making clear that the job is not over and that creating a level playing field for those companies and workers making auto parts must occur," Gerard added. Obama's decision will spare the union huge legal fees that it would have to spend to individually bring anti-dumping and countervailing duty cases against Chinese auto parts imports.
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