The US announced what it called a major victory for the US car industry in a World Trade Organisation (WTO) ruling on tariffs applied in China to US-made cars.
The ruling affirms Washington’s allegation that China’s imposition of up to 21.5-per-cent duty on cars manufactured in the US violated WTO rules, US trade representative Michael Froman said.
A WTO panel agreed on Friday that China’s imposition of anti-dumping duties and countervailing duties on American-made cars and sport utility vehicles (SUVs) breached numerous international trade rules, Froman said.
“Today’s WTO ruling confirms what we’ve known for a long time: that China’s anti-dumping and countervailing duty cases against US vehicle exports were without merit,” Congressman Sandy Levin of Michigan said at the briefing.
Levin said it was “laughable” for China, the “biggest dumping perpetrators in the world,” to claim that US vehicle exports were sold in China below the cost of production “when they are obviously not.” A Chinese embassy spokesman in Washington said the WTO rejected part of the US argument and gave full support to China on the definition of domestic industry and partial support to China on other disputed points.
“China has reservations on the panel’s ruling on other issues such as disclosure of the calculation of the dumping margin and factors influencing the price,” spokesman Geng Shuang said in an e-mail to DPA.
The tariffs, which ranged from 2 per cent to 21.5 per cent, were imposed for two years starting in December 2011. The US took its claim to the WTO in July 2012.
“This is the third time that the US has prevailed in a WTO dispute challenging China’s unjustified use of trade remedies,” Froman said. “Each time a WTO panel of experts has made clear that China has no basis whatsoever for imposing duties on American goods.” The two earlier disputes were over US specialty steel products and chicken broiler products.
The US exported $65 billion worth of cars last year, including $8.5 billion worth to China.
The challenge to China’s duties was on behalf of nine carmakers with US plants. These included the Big Three US carmakers — General Motors, Ford and Chrysler — and non-US brands, including BMW, Honda, Toyota and Mercedes. The companies employ 850,000 US autoworkers.
China’s duties applied only to sports-utility vehicles and other cars with engine capacities of 2.5 litres or greater, manufactured at those companies’ plants in nine US states, amounting to about $5 billion of the $8.5 billion worth of cars sold to China last year.
A senior US trade official speaking at a briefing with Froman said China let the tariffs expire “as a direct response to this case.” The official did not provide a figure estimating the damage the tariffs caused to the carmakers and said that the ruling did not penalise China for imposing the anti-dumping measures.