July 06–WASHINGTON — Building on Detroit automakers’ resurgence as a centerpiece of his re-election effort, President Barack Obama on Thursday challenged China’s tariffs on vehicles imported from the U.S.
At issue are more than 80% of U.S. auto exports to China, and the duties fall particularly hard on General Motors and Chrysler. The Chinese government imposed the duties last December.
They affect large-engine autos and SUVs exported from the U.S. Those vehicles are worth approximately $3.3 billion.
Taken together, the duties are 15% on the Jeep Grand Cherokee made in Detroit and 22% on the Buick Enclave and Cadillac CTS produced in the Lansing area.
For all U.S. automakers, anti-dumping duties range from 2% to 8.9% while countervailing duties — intended to reduce the impact of subsidies — range from 6.2% to 12.9%.
The automakers, however, were largely silent on the administration’s request for consultations at the World Trade Organization.
Coming as it did with Obama on a campaign stop in suburban Toledo, some saw the challenge — one of several taken against China trade policies in recent years — as largely political.
“It’s not an automotive business issue. It’s a political issue,” said Rebecca Lindland, an analyst with IHS Automotive. With the government estimating the duties would impact only about 92,000 vehicles a year, she said, “It’s not necessarily something that’s going to cripple the industry.”
There was no immediate word from the Chinese government in response to the request for consultations.
The Office of the U.S. Trade Representative complained that in raising the duties late last year, Chinese officials did so without sufficient evidence of product dumping or injury to automobile manufacturers already producing in that country.
More than 18 million new cars were sold last year in China, which is now the world’s largest automotive market.
If the two countries don’t resolve the challenge through negotiations in the next 60 days, the U.S. can request that a WTO panel resolve the dispute.
In earlier cases, the U.S. has challenged Chinese duties on chicken products and export restraints on industrial raw materials.
Last month, the U.S. government won a dispute over tariffs on certain types of steel exports.
“American autoworkers and manufacturers deserve a level playing field, and we are taking every step necessary to stand up for them,” said U.S. Trade Representative Ron Kirk.
An IHS Automotive estimate of impacted vehicles expected to be sold in China this year — which it put at 121,000, higher than the government’s 2011 count of 92,000 vehicles sold — indicated BMW would have the most vehicles affected, nearly 52,000.
Fewer than 20,000 Chrysler vehicles would be hit with the tariffs; GM would account for fewer than 14,000 of the vehicles coming under the duties. (Ford would have fewer than 250.)
Still, the issue could resonate with voters, and Michigan politicians from both parties hailed the administration’s move.
U.S. Rep. Gary Peters, D-Bloomfield Township, noted that he urged the White House to challenge China on the duties some months ago. U.S. Rep. Mike Rogers, R-Howell, said of the action: “Better late than never.”