Politics looms over U.S. move against China trade

11/02/2012 3:32 PM

11/02/2012 3:32 PM

With election-year politics looming, the Obama administration accused China on Monday of hurting U.S. autoworkers by illegally subsidizing its own auto and auto parts industry.

The U.S. said in a complaint to the World Trade Organization that China improperly made at least $1 billion in subsidies available to its auto industry from 2009 to 2011. The U.S. also asked the trade body to examine China’s imposition of duties on more than $3 billion in exports of U.S.-produced automobiles.

“It’s really irrefutable. The public documents that are available are damning enough that there’s not going to be too much worry about the outcome,” said Scott Paul, the executive director of the Alliance for American Manufacturing, who called the case “ironclad” and predicted that it will result in a favorable ruling for the U.S. “I expect China will push back vigorously; they always do. But the bottom line is they have no leg to stand on.”

United Steelworkers International President Leo Gerard noted that last year alone, China flooded the U.S. market with more than $11 billion in auto parts, an increase of nearly 900 percent since 2000. With China’s rapid growth, he said, the U.S. has lost nearly 400,000 jobs in the auto-parts sector in the last 11 years. China trails only Canada among the top trading partners with the U.S., and U.S. officials predict that China will rank No. 1 within 10 years.

The Chinese Embassy in Washington didn’t respond to a request for comment.

The move had political overtones, aimed at the 800,000 U.S. workers in the auto and auto-parts manufacturing sector.

Those workers represent a key voting bloc in pivotal election battleground states such as Ohio and Michigan, where President Barack Obama is battling rival Mitt Romney, a Michigan native and the son of an auto company executive. Obama, whose White House leaked word of the trade move to Ohio news media Sunday and who then touted the move during a campaign trip Monday to Ohio, hopes that it will add to any popularity he has among autoworkers thanks to the 2009 industry bailout. The recent Democratic National Convention repeatedly highlighted the bailout and its impact in key election states.

Romney called it a political gambit. His campaign noted that it was the second time in three months that the Obama administration had announced a major trade case against China during a visit to Ohio.

“President Obama has spent 43 months failing to confront China’s unfair trade practices,’’ Romney said in a statement. “Campaign-season trade cases may sound good on the stump, but it is too little too late for American businesses and middle-class families. . . . I will not wait until the last months of my presidency to stand up to China, or do so only when votes are at stake. “

Romney has vowed a tough stand against China on trade matters, including a promise to label the country as a currency manipulator on the first day of a Romney presidency.

Obama campaign spokeswoman Jen Psaki said Romney had “a special kind of chutzpah that he is going to criticize the president on an issue that he has been such a strong advocate and fighter for.”

“This is something that you can expect to hear the president talk about, and this is something you can expect to hear the president continue to do over the course of the next 50 days,’’ White House spokesman Josh Earnest added. "After all, it’s not as if because we’re in the midst of an election that we should just wait until next year to take these steps.”

But it was clear that the White House hoped to capitalize on the announcement on the day Obama traveled to Ohio for the 28th time during his presidency. His campaign has spent months portraying the president as a champion of American workers and accusing Romney of shipping jobs overseas.

Appearing at a pair of campaign rallies Monday in a park near downtown Cincinnati, Obama took aim anew at Romney’s tenure as a corporate executive: “You can’t stand up to China when all you’ve done is send them our jobs. You can talk a good game, but I like to walk the walk."

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