USTR: China grounds domestic tax exemptions for small planes

The White House said Tuesday that China has ended tax exemptions that had unfairly benefited the country’s domestic manufacture of certain types of aircraft over equivalent imports.    The White House said Tuesday that China has ended tax exemptions that had unfairly benefited the country’s domestic manufacture of certain types of aircraft over equivalent imports.
   The U.S. government had challenged these tax exemptions at the World Trade Organization (WTO) in December 2015. China’s policy exempted certain aircraft produced in China – generally those under 25 metric tons by weight, including general aviation, business jets, and regional aircraft – from a 17 percent value-added tax. However, the country imposed those taxes on imported aircraft.
   “This impacted producers of American-made aircraft as well as American parts producers who provide components to foreign-made aircraft,” the Office of the U.S. Trade Representative said.
   The Obama administration noted that it carried out its own investigation to uncover these discriminatory policies, and that China did not publish these tax exemptions, nor the official documents that ended them at the time, as required by its WTO commitments.
   “While we are happy to announce this discrimination has ended, we remain deeply concerned about China’s lack of transparency on taxes affecting American products,” said U.S. Trade Representative Michael Froman in a statement.
   “Transparency is a core obligation in the international trading system. China should not impose discriminatory taxes or conceal them,” he added. “Our proactive efforts in this case put a spotlight on this problem and prompted China to remove the secrecy that obscured this policy.”
   Since 2009, the United States has brought 14 trade enforcement actions against China in the WTO.