The Obama administration has ratcheted up tensions with China by filing a new trade complaint for exorbitant tariffs China has imposed on the import of large American-made cars and SUVs into the China market.
Like two siblings smacking each other on a long car trip, the U.S. and China have been engaging in a longstanding feud over the trading of American and Chinese goods. Republican challenger Mitt Romney has claimed that Obama is too soft on China, but Obama told a crowd yesterday in Ohio that he has filed trade complaints against China at a faster pace than his predecessor, George W. Bush.
Obama said 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 percent affect about 90,000 U.S.-made vehicles exported annually to China, totaling about $3.3 billion in sales, according to the Obama administration. They disproportionately affect General Motors Co. and Chrysler because China believes that the bailouts of those companies starting in 2008 by the federal government constituted federal subsidies and that U.S. automakers sold exported American-made vehicles at below fair-market value. The U.S. has disputed that claim, which China made in May 2011.
But analyst Jeremy Anwyl, vice chairman of auto information company Edmunds.com, said the majority of the cars sold in China by U.S. automakers are built there in joint ventures with Chinese companies, not imported. So the duties China put in place in December have had little real 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 3 1/2 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.”