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China Considering Challenging US Auto Subsidies

Truth be told, I saw this coming when the World Trade Organization recently ruled in Boeing’s favor against the European Union’s long history of subsidizing Airbus (Airbus has rarely — if ever — made a profit without British, French, and German taxpayers forking the bill.).  Eventually, some country would look at the various auto bailouts, tax subsidies, corporate welfare packages states have given them, etc., etc., and come with a case against the US’s recent subsidizing of the auto industry and bring it before the WTO over the same reasons Boeing took on Airbus.

I just never expected it’d be the Chinese to launch the challenge.

China has told the United States it is launching a trade investigation that could lead to new import duties on autos and sports utility vehicles made by Chrysler, Ford and General Motors, a U.S. industry official said on Wednesday.

[…]

“The documents containing the charges were presented by China to the U.S. government this week, but have not yet been translated. Therefore we are not in a position to comment on the matter at this time,” Steve Collins, president of the American Automotive Policy Council, told Reuters.

He estimated the traditional Big Three U.S. automakers export about 9,000 vehicles to China.

Total U.S. passenger car exports to China — which would also include those made by manufacturers such as BMW and Nissan — were $1.1 billion in 2008.

As a likely-end consumer of American cars, the Chinese government has a very legit beef with the auto bailouts and even the “Cash for Clunkers” programs.  Without them, the excess inventories might have made their way to China; at a discount, and sold there.  With the programs and subsidies, the Chinese are paying full price was last year’s models.

We’re quickly seeing the other side of the coin about having the Chinese as full-fledged World Trade Organization members.  Though we can now sue them with a governing body to enforce the rulings found against them; they can sue back.

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