US in new trade spat with China

Written By Sepatu on Senin, 17 September 2012 | 16.55

US President Barack Obama is expected to file a new trade complaint against China, accusing it of illegally subsidising exports of cars and car parts.

A White House official said China's actions were forcing US manufacturers to shift production overseas.

"The key principal at stake is that China must play by the rules of the global trading system," said a White House official.

Mr Obama's move is seen as political.

President Obama will announce the World Trade Organization (WTO) action against China when he visits the US state of Ohio, which has more than 50,000 workers employed in the car industry.

Ohio is a critical state in the upcoming presidential elections on 6 November, with success there seen as a crucial pre-requisite to becoming President.

The US and China are already involved in a series of trade disputes at the WTO. The contentious issues include Chinese solar panels and rare earth exports, among others.

In the latest wrangle, the Obama administration clams that China's "illegal subsidies" in the car sector totalled $1bn (£600m) between 2009 and 2011.

The US President believes that the subsidies encourage the US to outsource car and car parts production to China, with these products then exported into the US or other nations.

China pledged to wipe out export subsidies when it joined the WTO in 2001.

Last week, President Obama's main Republican rival Mitt Romney accused Mr Obama of being too soft on China.

17 Sep, 2012


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Source: http://www.bbc.co.uk/news/business-19621814#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
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