U.S. to fight new tariffs on big cars exported to China

Dec 15, 2011

American politicians are vowing to fight new Chinese tariffs on large U.S. made cars and SUVs.    

In 2010, the U.S. won a Chinese tire-dumping complaint before the World Trade Organization. 

China has complained about U.S. poultry dumping.  The U.S. is investigating whether China subsidizes solar panels. 

Now the fight is over cars.  Republican Congressman Kevin Brady of Texas heads a trade subcommittee. 

"They are in effect creating cases out of thin air to try to retaliate against our industries.  Unfortunately, in this case it’s one of our key industries, American auto."

The new tariffs of up to 20% won’t devastate American car companies.  Ford and GM build almost all their cars for the Chinese market in China, and Chrysler exports only a few thousand cars to China.  

Alan Deardorff  is with the Ford School of Public Policy.  He takes the long view of the tariff disputes.

"These things working their way through the system I think is just better than working outside the system, which is what used to happen before we had the WTO."

Deardorff says what American politicians are really upset about is China’s currency manipulation.  That does hurt U.S. companies.  The WTO doesn’t regulate currency disputes – but it may in the future.  Deardorff says could make these tariff fights with China less frequent.