More US-China Trade Fallout From the Tire Tariffs Case

2009-10-29

Now China is going after US autos. I'm really interested to know what this one is all about. Is China going after US autos because of the bailout money? Those funds were not linked to exports (as far as I know), which is the most direct no-no under WTO law, so the real question would be whether, and to what extent, the bailouts had an effect on auto exports.

It's been a few years since my WTO law class, and I can't remember exactly what the analysis is for allegedly improper subsidies. If the case goes forward, and it is indeed about the bailout, I may have to crack the books again and refresh my memory.

Anyway, this is what we know so far:

China has told the United States it is launching a trade investigation that could lead to new import duties on autos and sports utility vehicles made by Chrysler, Ford and General Motors, a U.S. industry official said on Wednesday.

[. . .]

President Barack Obama, who will visit China in mid-November, angered Beijing last month by slapping a 35-percent duty on imports of Chinese-made tires which totaled about $1.8 billion last year.

China immediately challenged the action at the World Trade Organization and also said it would launch an anti-dumping and countervailing-duty investigation against U.S. autos to offset unfair pricing and government subsidies.

[. . .]

GM and Chrysler have received more than $64 billion combined in bailout and bankruptcy financing from the government this year.

Ford did not seek or receive any federal bailout money. But they did get funds from the Department of Energy to help convert facilities to make more fuel-efficient cars. (Reuters)

Tags: International Trade, U.S.-China Relations