WASHINGTON, D.C. – Today, U.S. Sens. Sherrod Brown (D-OH) and Rob Portman (R-OH) applauded the World Trade Organization’s (WTO) decision to defend the American auto industry from China’s illegal tariffs on U.S. autos. Troubled by China’s violation of WTO rules in application of anti-dumping duties (AD) and countervailing duties (CVD) on American-made auto exports, Brown and Portman urged the United States Trade Representative (USTR) to investigate the tariffs and use all available tools to protect Ohio workers and businesses. As a result, President Obama filed a complaint to the WTO, which ruled today that China must rescind these AD and CVD tariffs against American auto exports. This will directly benefit Ohio manufacturers of the Chrysler Jeep in Toledo and Honda Acura in Marysville.
“Today’s WTO decision is a significant step towards protecting our automakers from discriminatory trade practices,” said Brown, Vice-Chair of the Senate Auto Caucus. “In order to protect the one in every eight Ohio jobs connected to the auto industry, we must ensure our manufacturers are competing on a level playing field. To achieve this, our trading partners need to abide by WTO rules. Further, in ongoing trade negotiations like the TPP, we need to include provisions that give our manufacturers equal access to our trading partners’ auto markets; and include provisions which will enforce these commitments. I will continue to work with my colleagues to ensure Ohio’s auto industry remains among the strongest in the country, and the American auto industry remains the strongest in the world.”
“I first raised strong concerns with these unfounded Chinese actions nearly three years ago, and today’s ruling is a victory for auto workers in Ohio and across the country,” said Portman, Co-Chair of the Senate Auto Caucus who initiated the first-ever legal case to be litigated and won against China before the WTO because of China's unfair treatment of U.S.-made auto parts. “China remains a vital export market for American goods and services, but China must follow global trade rules, and when they don’t, we’ll hold them accountable every time.”
In December 2011, China imposed on American-made autos AD ranging from 2.0 percent to 21.5 percent, and CVD ranging from 6.2 percent to 12.9 percent. The U.S. exports $8.5 billion worth of autos to the Chinese market. Of that total, $5.1 billion worth is levied illegal tariffs. But, in culmination of Brown’s and Portman’s efforts, the Administration initiated a WTO challenge to these discriminatory practices in July 2012. While WTO members have the ability to levy AD and CVD duties against other members—when warranted and in accordance with WTO rules—it was determined today that China:
Directly benefitting from today’s decision are auto companies and workers which export to China, including Chrysler, which has a Jeep plant in Toledo; and Honda, which has an Acura plant in Marysville. In 2013, the U.S. auto industry employed more than 838,000 workers and produced about $37 billion in economic output. Just in Ohio, one in every eight jobs is connected to the auto industry; one in every six cars produced in the United States is made in the state; and 80 of its 88 counties are home to an auto manufacturing facility.
Brown and Portman continue to support Ohio’s manufacturers and the jobs they support. This is the second time that the senators fought together—and succeeded—in urging the USTR to initiate a WTO challenge against illegal Chinese trade practices. The first was a case involving Chinese hoarding of rare earth materials, tungsten, and molybdenum. In September 2011, Brown and Portman urged the USTR to take action. In March 2012, the Administration answered the senators’ call and challenged China, in cooperation with the European Union (EU) and Japan. And in March 2014, WTO ruled against China and in favor of Ohio’s manufacturers.
In 2011, Brown authored and Portman voted for the Currency Exchange Rate Oversight Reform Act, bipartisan legislation which would use U.S. trade law to counter the economic harm to U.S. manufacturers—especially those in the auto industry—caused by currency manipulation and provide consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment.
Brown’s and Portman’s 2011 letter to then USTR Ron Kirk can be read in its entirety and below:
Dear Ambassador Kirk,
We are troubled by China’s recent announcement that it will impose new antidumping duties on American automobiles entering China. This unfounded decision by the Chinese government appears to lack justification and merit, especially given that China already imposes high tariffs and taxes on U.S. automobiles, severely limiting American auto sales in China.
Further, as we recognize the ten year anniversary of China’s entry into World Trade Organization (WTO) this week, we are particularly concerned that China is taking this step, which could violate China’s WTO commitments.
This decision to impose additional tariffs on U.S. automobiles has a direct impact on Ohio exports and jobs in our state. Ohio is a powerhouse automobile and auto supplier manufacturer, exporting thousands of Ohio-manufactured vehicles every year to consumers around the world.
Unfortunately, this is not our only area of concern with China’s trade policies. We continue to be concerned by intellectual property violations in China, the Chinese government’s continued support for thousands of state-owned enterprises, the persistent problem of trans-shipment and mislabeling of products coming from China that evade U.S. customs duties, and the hoarding of rare earth minerals, among other areas. Additionally, we believe that China is manipulating their currency to the detriment of American workers and exporters.
We recognize China’s vital role as a U.S. export market. In fact, over $2.2 billion of Ohio goods were exported to China last year, making it Ohio’s third largest export destination. We understand China’s emergent role in the global marketplace, but China must compete fairly and play by the rules.
We ask you to closely review the new Chinese tariffs and to use all available tools to address this important issue.
Thank you for your attention to this matter.