U.S., EU step up fight against China’s auto import tariffs
The United States and European Union have both requested World Trade Organization dispute settlement consultations with China Thursday to change the way the country handles imports of auto parts.
The Bush administration said China’s taxes discourage Chinese automakers from using imported auto parts in the assembly of vehicles. China recently implemented regulations that impose a tax on imported auto parts equal to the tariff on finished autos. If the number or value of imported parts in the finished autos exceeds specified amounts, China’s regulations assess each of the imported parts a charge equal to the tariff on complete autos, typically 28 percent, rather than the tariff applicable to auto parts, which ranges from 10 to 14 percent.
“Effectively, China’s regulations discriminate against U.S. and third-country auto parts in favor of Chinese-manufactured parts,” the Office of the U.S. Trade Representative said in a statement.
The USTR hopes that WTO consultation will quickly resolve the dispute. The United States brought the only previous WTO case against China. That dispute, involving China’s tax rebate on semiconductors, was resolved during the consultation phase. A second dispute, involving China’s antidumping duties on kraft linerboard, was resolved on the day the United States was to initiate the dispute.
Consultations are generally the first step in a WTO dispute. Under WTO rules, parties that do not resolve an issue through consultations may refer the matter to a WTO dispute settlement panel.