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US wins bout with China-set car tariffs

Froman

– The United States has scored a victory before the World Trade Organization in a case that challenged China’s imposition of penalty tariffs on the sale of $5 billion in U.S.-made vehicles in China.

A WTO panel ruled Friday that China’s tariffs violated international trade rules. The ruling came during a week when the U.S. Justice Department charged five Chinese military officers with hacking into U.S. companies’ computer systems to steal trade secrets.

The two developments pointed to intensifying trade tensions between the world’s two biggest economies.

The dispute panel for the WTO sided with the United States in its ruling. It said China had acted inconsistently in imposing the anti-dumping requirements in violation of its WTO commitments.

U.S. officials said China withdrew the tariffs in December in response to indications that it would lose the WTO case. Officials said they pushed forward with the case to establish the precedent that China’s actions violated global trade rules.

The WTO allows countries to raise import duties to offset improper subsidies and dumping. But the complaint the Obama administration filed in 2012 accused Beijing of improperly imposing the anti-dumping duties.

The administration contended that China’s tariffs were imposed in retaliation for penalty tariffs the administration had levied on Chinese-made tires.

China had defended the duties on U.S.-made vehicles as legal under international rules. It asserted that the administration’s bailouts of General Motors Corp. and Chrysler amounted to unfair government subsidies. China’s duties affected cars and sport-utility vehicles with engines of 2.5 liters or larger.

U.S. Trade Representative Michael Froman said the WTO ruling would benefit America’s nearly 850,000 autoworkers. China has become America’s second-largest auto export market. In 2013, the United States exported $64.9 billion of autos, with $8.5 billion of that total going to China.

Froman said the penalty duties, ranging up to 21.5 percent, hit $5.1 billion of America’s auto exports to China last year. The penalties covered such popular models as the Jeep Grand Cherokee, the Cadillac Escalade and the Buick Enclave.

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