The US plans to launch a case at the World Trade Organization against China, concerning the export subsidies on vehicles and car parts.
The White House announced their plans before President Barack Obama’s visit in Ohio, the key election battleground. According to the case, China’s export subsidies put the US manufacturers at a competitive disadvantage, being forced to shift production overseas.
“The key principle at stake is that China must play by the rules of the global trading system,” a White House official said. “When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field.”
Finally something has been done concerning this issue, after during the November presidential election, Mr Obama and Republican Mitt Romney kept accusing each other of being too soft on China, the world’s second-biggest economy. This Sunday, September 16th, President Obama announced that China’s car and car parts export subsidies have reached $1 billion between 2009 and 2011 and that this violates the WTO prohibitions regarding the ‘export contingent subsidies’ that China signed 10 years ago when it joined the global trade body.
Earlier this year, the White House has launched a case related to China’s exports of rare earths and another was connected to China’s imposition of countervailing and anti-dumping duties on US vehicle exports, intensifying the trade tensions between the two nations.