U.S. China Trade Dispute over American Automobiles

Global Business

The World Trade Organization has sided with the U.S. in a trade dispute with China over American automobiles. CCTV’s Phillip Yin is joined by CCTV correspondent Jessica Stone to talk about all the details. 

U.S. China Trade Dispute over American Automobiles

U.S. China Trade Dispute over American Automobiles

The World Trade Organization has sided with the U.S. in a trade dispute with China over American automobiles. CCTV’s Phillip Yin is joined by CCTV correspondent Jessica Stone to talk about all the details.
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The case dates back to July 2012, so just about two years ago. China had begun imposing duties on some of the largest American cars and SUV’s — made by General Motors and Chrysler. The Chinese Ministry of Commerce said the duties were warranted in part because those automakers were improperly subsidized by the U.S. government bailout in 2009. But the WTO ruled that China failed to prove that Chinese automakers were injured as a result.

The streets of China have quickly become the second largest market for American automobiles. General Motors, alone, sold more than three million vehicles in China in 2013. That’s an average of one car every 10 seconds.

It’s perhaps no surprise that the United States would want to protect its access to that market. In July 2012, the U.S. filed a World Trade Organization complaint against China after China imposed duties on larger General Motors and Chrysler cars and sport utility vehicles, or S-U-V’s.

China claimed the duties were warranted in part because of the 2009 U.S. auto bailout of G-M and Chrysler. The WTO disagreed. For the U.S., the dispute is part of an effort to keep more than 800-thousand American autoworkers on the job.

Debbie Stabenow, U.S. Senator, says: “China has had 14 years to start playing by the rules, but instead, we see illegal and improper activities over and over again. As long as China keeps this up, we have to respond with this strong enforcement actions.”

The ruling will have no immediate impact, since China’s Ministry of Commerce ended the duties last December. This was after they affected some 5 billion dollars’ worth of  U.S. auto exports in all of last year. The Ministry had no comment on the WTO’s decision Friday.

Michael Froman, U.S. Trade Representative, says: “I’m pleased that China has announced termination of duties — that is already a direct result of prosecution of this case.”

The announcement comes just four days after the U.S. Justice Department filed criminal indictments against five Chinese military officers for economic espionage. And it’s less than two months before the all-important Strategic and Economic Dialogue and Joint Commission on Commerce and Trade between the U.S. and China. It’s raising the question of whether the bilateral relationship can handle the strain.

The U.S. Trade Representative’s office says the relationship can handle it but it is not clear what the Chinese commerce ministry thinks since it’s weekend in China. But people should keep in mind that this is the third case in which the U.S. questioned Chinese duties “it” said were a remedy for U.S. subsidies.

For more on the trade dispute, CCTV’s Phillip Yin is joined by Professor Liu Baocheng, Dean of the Center for International Business Ethics at the University of International Business and Economics, from Beijing, to discuss more.

Liu Baocheng on U.S.-China Trade Dispute

Liu Baocheng on U.S.-China Trade Dispute

CCTV’s Phillip Yin is joined by Professor Liu Baocheng, Dean of the Center for International Business Ethics at the University of International Business and Economics, from Beijing, to discuss more.
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