Today, President Obama heads to Ohio and, in a push for manufacturing votes, he will hit China for subsidizing its auto industry and giving it an unfair trade advantage. It's a fairly standard campaign strategy, appealing to the Rust Belt by talking up American Made and attacking foriegn trade manipulation. Reuters reports:
The new U.S. case filed at the World Trade Organization targets what Washington said were "extensive subsidies" to Chinese auto and auto-parts producers located in designated regions, known as export bases.
"Those subsidies directly harm working men and women on the assembly line in Ohio and Michigan and across the Midwest. It's not right; it's against the rules; and we will not let it stand," Obama said in the advance text of a speech he was to deliver in Ohio.
It's part of a larger, escalating trade dispute between the American and Chinese governments, with the former upset about the subsidies and the latter taking issue with duties on its exports. The WTO is not expected to issue a decision on the U.S.'s case until after the election, so at the moment, it's mainly just a subject for the stump.
Of course, it does make for a bit of a strange dichotomy in the headlines today: the president may be making his case against foreign auto subsidies, but meanwhile, General Motors is pushing for the U.S. government to sell off its shares, and the Treasury is refusing.
CHICAGO (MarketWatch) -- The Treasury Department is resisting General Motors' push for the government to sell off its stake in the auto maker, The Wall Street Journal reports. Following a $50 billion bailout in 2009, the U.S. taxpayers now own almost 27% of the company. But the newspaper said GM executives are now chafing at that, saying it hurts the company's reputation and its ability to attract top talent due to pay restrictions. Earlier this year, GM presented a plan to repurchase 200 million of the 500 million shares the U.S. holds with the balance being sold via a public offering. But officials at the Treasury Department were not interested as selling now would lead to a multibillion dollar loss for the government, the newspaper noted.
Granted, I'm not fond of the idea of the taxpayers taking such a massive hit, and I can understand why the government won't extricate itself at the moment. But there's certainly something discordant about the president attacking China's protectionist policy while sitting on over a quarter of GM stock. Here's the best articulation of the whole situation, taken from Twitter, naturally:
The owner of 500 million shares of $GM is accusing China of subsidizing its auto industry.— Tony Fratto (@TonyFratto) September 17, 2012