US and China exchange fire over duties

Beijing and Washington both filed trade complaints against each other yesterday in a tit-for-tat exchange after the US said it would launch a case against China's unfair support for its car industry.

The two cases could shift the focus to President Barack Obama's management of the sometimes contentious US relationship with China and his support for the US car industry in the final weeks before a close presidential election.

Beijing's complaint to the World Trade Organisation about a new US law allowing duties on subsidised goods from China came a few hours after the White House said it would launch a trade complaint over what it says is China's unfair backing of its car industry.

The US trade representative subsequently filed a case against China, saying: "Export subsidies are prohibited under WTO rules because they are unfair and severely distort international trade. China expressly agreed to eliminate all export subsidies when it joined the WTO in 2001."

China's complaint potentially affects close to 30 products that have previously been targeted by US duties. In a brief statement, the WTO said the products included steel, tyres, magnets, chemicals, kitchen appliances, wood flooring and wind turbine towers.

In March, the House of Representatives voted to ensure the United States could impose duties on subsidised goods from China and Vietnam, a move the White House said was needed to protect American jobs.

China's Commerce Ministry said: "China hopes that the United States can correct its mistaken policy and appropriately resolve China's concerns through WTO dispute resolution mechanisms and consultations."

It made no mention of the US decision to initiate a case against China at the WTO over subsidies for cars and car parts.

The move allows Mr Obama to take a stand on China and advance the interests of a major job-providing industry. His opponent, Mitt Romney, has attacked Mr Obama for what he says is an overly cautious approach towards China.