The U.S. Trade Representative has filed a complaint with the World Trade Organization, alleging that the Chinese government is imposing unfair tariffs on American-made cars imported to China. According to the complaint, China enacted its duties in response to an American limit on the number of imported Chinese-made tires.
In late 2009, President Obama enacted a 35-percent import tariff on all Chinese-made tires. The move came as more and more tire companies outsourced production from America to China, reportedly sending at least 5000 jobs overseas. That apparently spurred China to retaliate with its own set of fees on American goods imported to China.
In December 2011, the Chinese government enacted "anti-dumping" duties as high as 21.5 percent, and "countervailing" duties up to 12.9 percent, on all American-made cars and SUVs with an engine larger than 2.5 liters. Anti-dumping rules are meant to counter foreign companies selling products at a lower cost to beat domestic suppliers, while countervailing rules are in response to foreign governments that subsidize exports.
According to U.S. Trade Representative Ron Kirk, last year American companies exported about $3 billion worth of vehicles that fall under the new tariffs to China, including the Jeep Wrangler and several General Motors models.
"The Obama Administration will continue to fight to ensure that China does not misuse its trade laws," Kirk said in a statement. "American auto workers and manufacturers deserve a level playing field and we are taking every step necessary to stand up for them."
Representatives from China and the U.S. now have 60 days to resolve the issue in consultations moderated by the World Trade Organization. Earlier this year, the U.S. Department of Commerce also imposed import duties on Chinese-made steel wheels.
Sources: The New York Times, Office of the U.S. Trade Representative