The Bush administration filed a complaint with the WTO accusing China of providing companies with improper subsidies that hurt US firms.
The action came as the administration faced increased pressure from the Democratic-controlled Congress to do something about the nation's soaring trade deficits and lost manufacturing jobs, which critics blame in part on unfair trade practices by foreign nations.
The complaint filed on Friday alleges that China uses illegal tax breaks to encourage Chinese companies to export more to the US while imposing tax and tariff penalties to limit purchases of US products in China.
"We are seeking to level the playing field to allow US manufacturers to compete fairly with Chinese firms," US Trade Representative Susan Schwab said in announcing the case.
"The United States believes that China uses its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods," Schwab said.
The dispute centered on Chinese subsidies of steel, wood products, information technology and other products that compete with goods made in the US, she said.
The decision to go to the WTO with a trade complaint will trigger a 60-day consultation during which trade negotiators will try to resolve the dispute. If that fails, a WTO hearing panel will be convened and if the US wins the case, it will be allowed to impose economic sanctions on Chinese products.
Schwab's announcement came two days after US Treasury Secretary Henry Paulson faced stiff questioning before a congressional panel, where both Democrats and Republicans accused the administration of doing too little to deal with the US' record trade deficits, including deficits with China, which are at all-time highs.
"Forcing China to eliminate its illegal subsidies will keep world markets open to US goods, keeping jobs at home," said Senate Finance Committee Chairman Max Baucus, a Democrat.
John Engler, the former Michigan governor who is now head of the National Association of Manufacturers, said he was disappointed that other major trading partners including Japan and the EU refused administration requests to join in filing the case.
"We hope that other countries will reconsider joining the case, recognizing it is not fair to have the United States do all the heavy lifting," Engler said.
The case against China on subsidies is the second WTO case the administration has filed in the past year. Last March, it filed a case accusing China of using an illegal tax system to block imports of US and other foreign-made auto parts into China.
Two other potential WTO cases involving Chinese barriers to sales of US-made computer chips and linerboard were resolved before dispute panels were convened.
EXTRADITION DEAL? A former prosecutor said that the US Department of Justice might ask Taiwan to extradite the men in return for the US doing something in return The US won arrest warrants for three Taiwanese men — a former president of China-based Fujian Jinhua Integrated Circuit Co (福建晉華) and two engineers — charged with stealing secrets from Idaho-based Micron Technology Inc. The effort to apprehend the three men — former Fujian Jinhua president Stephen Chen (陳正坤), and Ho Chien-ting (何建廷) and Wang Yong-ming (王永銘), who work for Taiwan-based United Microelectronics Corp (UMC, 聯電) — is notable because they were charged in 2018 in the first case filed under the “China initiative” of US President Donald Trump’s administration targeting trade-secret theft, hacking and economic espionage. However, legal experts have said
There was a net reduction last year in the number of Taipei residents and this year is expected to set a 23-year high for population decline in the city, Ministry of the Interior statistics released yesterday showed. From January to last month, 18,861 more people moved out of Taipei than moved into the capital, an increase of 7,000 from the same period last year, the data showed. That is a 7.2 percent decrease in the city’s population since the start of the year, the biggest drop in both percentage and total number among all municipalities and counties nationwide, the data showed. The data
COUNCILS CLASH: The Mainland Affairs Council said a new office in Hong Kong is to assist people with issues related to investment, study and employment in Taiwan The Mainland Affairs Council (MAC) yesterday denied an accusation by the Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council that its Taiwanese counterpart in the territory was “interfering with Hong Kong’s internal affairs.” The Hong Kong council leveled the accusation after Taipei’s Taiwan-Hong Kong Economic and Cultural Co-operation Council this month announced it would establish a Taiwan-Hong Kong Services and Exchanges Office to facilitate humanitarian aid for Hong Kongers. The new office is scheduled to begin operations on Wednesday. The MAC yesterday asked the Hong Kong council to “not misinterpret” the government’s intentions. The two Taiwan-Hong Kong councils were established in 2010 to
IRRESPONSIBLE ATTITUDES? Some experts say the NHI system does not do enough to educate the public, or pay doctors to talk to patients, about healthy lifestyles While the life expectancy of Taiwanese newborns in 2018 reached 80.69 years, the number of years people spent in poor health hit a record high at 8.41 years, Ministry of Health and Welfare statistics showed on Saturday. Healthy life expectancy is calculated by a person’s life expectancy minus the time they spend in ill health, such as the loss of mobility, disabilities and chronic disease, based on medical records and calculations about the years they live with disabilities. The number of years that Taiwanese spend in poor health is increasing slowly, but steadily, rising by 0.46 years, or five-and-a-half months, between 2012