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Obama Administration Files Auto-Parts Subsidy Case Against China



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President Obama has found a new effective way to take advantage of, as Kevin Williamson has labeled it, “China-Hating Season.” The New York Times explains his latest campaign maneuver:

The Obama administration plans to file a broad trade case at the World Trade Organization in Geneva on Monday accusing China of unfairly subsidizing its exports of autos and auto parts . . . The W.T.O. case accuses China of providing at least $1 billion worth of subsidies from 2009 to 2011 for exports of autos and auto parts. While China exports virtually no fully assembled cars to the United States, it has rapidly expanded exports to developing countries, and those exports compete to some extent with cars exported or designed in the United States.

President Obama plans to announce the move on Monday during a visit to Ohio, one of the most important of the battleground states and a place where the president is trying to capitalize on his bailout of the auto industry. A poll by NBC News, The Wall Street Journal and Marist College last week showed Mr. Obama building a significant lead in Ohio. . . .

Auto parts manufacturers directly employ 54,200 people in Ohio, and when suppliers like steel makers are included, the auto industry accounts for 850,000 jobs in the state, or 12.4 percent of total employment there.

But auto industry experts debate the extent to which those imports have been directly responsible for the closing of factories and for cutbacks at other plants, as ever-increasing automation has also played some role. The slowing of the American auto market since 2008 has had an effect as well, although auto sales have begun to recover in recent months. . . .

Asked whether the trade cases against China were timed for political impact, the senior administration official replied by e-mail that “President Obama has prioritized enforcement of Americans’ rights in the global trading system from day one, and this administration has a consistent record of action to support American jobs.”

The specific phrasing of the complaint, so far, regards the following: “China’s measures providing subsidies such as grants, loans, forgone government revenue, the provision of goods and services and other incentives contingent upon export performance to automobile and automobile-parts enterprises in China.” Making it relevant to the WTO is the “contingent upon export performance” bit, which may make China’s various subsidies specifically “export subsidies” variously either banned or “subject to reduction” in the WTO’s General Agreement on Tariffs and Trade. Otherwise, of course, the “General Motors is alive” administration, with the life support they’ve provided the U.S.’s domestic industry without such strictures, would hardly have the high ground here.



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