Ways and Means Committee Chairman Emeritus Congressman Charles B. Rangel (D-NY) joined Ranking Member Sander Levin (D-MI) and Trade Subcommittee Ranking Member Jim McDermott (D-WA) today in applauding the announcement made by United States Trade Representative Ron Kirk that the United States has initiated a WTO challenge against China's unfair trade actions on American-made automobiles.
"I am very pleased that President Obama and his Administration continue to stand up for American workers and businesses against China's misuse of trade laws," said Rangel. "China's imposition of antidumping and countervailing duties on more than $3 billion in exports of American-produced automobiles is not only unfair but also harmful to our economy. China must play by the rules to which it agreed when it joined the WTO."
Shortly after President Barack Obama decided in September 2009 to impose a safeguard measure against Chinese tire imports, China's Ministry of Commerce announced that it would initiate antidumping and countervailing duty investigations of imports of American-made cars and sport utility vehicles (SUVs). Then, in May 2011, China's Ministry of Commerce issued final determinations in which it found that imports of American-made automobiles had been sold at less than fair value (i.e., "dumped") into the Chinese market and had also benefited from subsidies. WTO rules permit imposition of duties on imports of merchandise that are found to be dumped or subsidized, if those imports cause injury to the domestic industry. However, at that time, China suspended the imposition of duties.
Subsequently, in December 2011, China began imposing both antidumping and countervailing duties on imports of American-produced automobiles. The antidumping duties range from 2.0 percent to 8.9 percent, with an "all others" rate of 21.5 percent, and the countervailing duties range from 6.2 percent to 12.9 percent, with an "all others" rate of 12.9 percent. The specific products affected by the duties are American-produced cars and SUVs with an engine capacity of 2.5 liters or larger. Last year, the United States exported more than $3 billion of these automobiles to China.
"The U.S.-China economic relationship has the potential to create jobs and raise living standards in both countries. But the relationship is imbalanced and unsustainable. Last year, our bilateral trade deficit with China was $295 billion, roughly 40% of the total U.S. trade deficit. This trade deficit is a drag on U.S. job creation and economic growth," said Rangel.
China exports almost four times as much to the United States as the United States exports to China ($399 billon vs. $104 billion last year). According to a recent academic paper, between one quarter and one half of U.S. manufacturing jobs lost in the last decade were due to imports from China (i.e., one to two million jobs).
Added Rangel: "Ways and Means Democrats have long advocated for remedies to level the playing for Americans. We hope that the Chinese will revise their trade and industrial policies that are currently in violation of international trade rules. This is vital to reducing our trade deficit."
President Obama, in his most recent State of the Union Address announced the creation of an Interagency Trade Enforcement Center (ITEC) and has proposed an additional $26 million to support the ITEC. The Administration has also: (1) brought trade cases against China at nearly twice the rate as the last administration; (2) taken a leading role internationally in publicly confronting China's use of intimidation and retaliation as a policy tool; and (3) taken bold new steps to match China's export financing where China fails to observe international disciplines.