Trade tensions between the US and China have increased as the US said it would launch a case at the World Trade Organisation (WTO) alleging that illegal subsidies in China are applying to cars and car parts for export.
The Obama administration is set to begin an enforcement action with the WTO against China alleging that it is putting US manufacturers at a competitive disadvantage by illegally subsidising exports of autos and auto parts.
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Within hours of the US complaint hitting the news, China has said it will file a complaint at the WTO concerning a US law passed earlier this year that allows the US to apply countervailing measures to Chinese exports retrospectively (so-called ‘countervailing duties’).
In a brief statement on the initial filing by China, the WTO said the products cited by China, affected by the US measures, are paper, steel, tyres, magnets, chemicals, kitchen appliances, wood flooring and wind towers. The Chinese government is expected to file a full complaint with more details in the next few days.
Under WTO rules, China’s filing of the complaint creates a 60-day period during which the US can try to settle the dispute in bilateral talks. After that, China could ask a WTO panel to adjudicate.
