China’s Auto Subsidies Affecting US Companies, US Files WTO Case

Created: 2012-09-18 09:59 EST

Category: Business
The Obama administration has filed a complaint with the World Trade Organization against China for illegally subsidizing exports of cars and auto parts.
Spokeswoman for the Office of the United States Trade Representative Carol Guthrie said, “In taking this case to the WTO against China, we’re doing so in a way that tackles China’s entire export bases program in this sector.”
US companies are at financial risk as companies outsource car parts production to China.
Companies usually file anti-dumping and anti-subsidy cases against imports, resulting in tariffs on imported products.
Last year, a German company in the US filed anti-dumping and anti-subsidy cases against Chinese solar panels that led to tariffs of more than 33 percent.
While anti-dumping and anti-subsidy cases help only the country’s domestic market, a WTO complaint has the advantage of potentially helping US companies with their exports. 
Filing the case with the World Trade Organization aims to correct offending policies affecting trade all over the world, while anti-dumping cases only protect the country’s market.