US brings WTO case against Chinese taxes on raw materials

AP News
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Posted: Jul 13, 2016 11:54 AM

WASHINGTON (AP) — The United States is bringing a case against China to the World Trade Organization, arguing that taxes the Chinese impose on raw materials exports put U.S. manufacturers at a disadvantage.

"These duties are China's attempt to game the system so that raw materials are cheaper for their manufacturers and more expensive for ours," U.S. Trade Rep. Michael Froman said Wednesday.

Distrust of American trade policies has emerged as a potent issue in this year's presidential campaign. Republican Donald Trump accuses China of unfair trade practices and says he'll impose big taxes on Chinese imports. Democrat Hillary Clinton has come out against the Obama administration's signature trade initiative: the Trans-Pacific Partnership, which is meant to expand trade with 11 Pacific Rim countries.

The administration is eager to show that it is tough on trade. Wednesday's case against China was announced hours before Vice President Joe Biden was scheduled to give a speech in San Diego touting the White House's record on trade enforcement. The administration has brought 13 cases against China before the WTO.

China imposes duties of 5 percent to 20 percent on exports of nine raw materials, including cobalt, copper and graphite, used in industries ranging from aerospace to chemicals.

According to the U.S., China was supposed to eliminate the duties after it joined the World Trade Organization in 2001 but didn't. The duties raise the costs for U.S. manufacturers and give them an incentive to relocate to China to avoid paying them.

The 162-country WTO acts as judge in international trade disputes.

In response to the U.S. case, Zhu Haiquan, spokesman at the Chinese embassy in Washington, suggested that the U.S. itself risked running afoul of WTO rules by bringing so many cases against China.

"Opposing protectionism in trade is a consensus of international community," he said. "China urges the United States to strictly abide by the WTO rules, and restrain from abusing of trade remedy measures."