China and the U.S File Dueling Trade Complaints with WTO

Published Date : Sep 26, 2012

China and the United States filed trade complaints against each other with the WTO (World Trade Organization), further escalating the trade tension between the two economic giants amidst a turbulent global economy.

China and the United States, the two largest economies, are at the forefront again, with each slapping trade complaints against each other. Tension began when the U.S. challenged the Chinese subsidies provided on auto and auto parts, which threatened the already troubled American auto industry. President Obama, during his campaign in Ohio, a state with a prominent auto industry, alleged that Chinese auto subsidies are a threat to American jobs. His remarks have come at a time when presidential elections are approaching in November and Ohio can play a decisive role in the final outcome.

The United States has alleged in the complaint filed with the WTO that the Government of China provided millions of dollars as export subsidies to its auto parts maker.  The U.S. has enforced a trade bill in this regard that will enforce tariffs and duties on Chinese auto exports. The bill allows the United States Commerce Department to continue the enforcement of counteracting taxes on imports from economies like Vietnam and China. The bill was signed in March this year.

China counteracted with a complaint to the WTO against enforcement of duties by the U.S. on many of the Chinese imports. China has complained against the anti-dumping duties worth USD 7.2 billion levied by the U.S on goods imported from China. These include tires, steel and kitchen appliances. China’s exports of auto parts has grown to USD 70 billion annually making it the fourth largest exporter of auto parts to the U.S. market.

China has requested for consultation with the U.S. through the WTO against the duties imposed. The two have 60 days to resolve the issue through consultation, before the WTO panel looks into the case, as per the WTO rules.