Making a case that they violate Beijing’s commitments to the World Trade Organization and give an unfair advantage to Chinese manufacturers, the United States challenged China’s export duties on nine key metals and minerals on Wednesday.
The move came with an Obama administration eager to demonstrate that it is taking a tough stance on enforcing international trade agreements, which have come under fire from the presumptive Republican presidential candidate Donald Trump and from within Obama’s own Democratic party.
Vice President Joe Biden later on Wednesday was expected to hype President Barack Obama’s trade enforcement record as being more aggressive than past administrations in a speech at the Port of San Diego.
U.S. Trade Representative Michael Froman said the raw materials case seeks to remove China’s export duties of 5 percent to 20 percent on antimony, cobalt, copper, graphite, lead, various magnesia compounds, talc, tantalum and tin, which it said are key inputs into U.S. industries, including aerospace, autos, electronics and chemicals.
He said the duties impose higher costs on U.S. manufacturers, while Chinese competitors do not have to pay them, encouraging companies to locate production in China.
“These duties are China’s attempt to game the system so that raw materials are cheaper for their manufacturers and more expensive for ours,” Froman said in a statement.
“This scheme is directly at odds with WTO commitments China has made, and, as we’ve shown time and again, we will hold them accountable to their commitments.”
The Office of the U.S. Trade Representative said that China had committed, as part of the terms of its joining the WTO in 2001, that it would eliminate export duties for all products other than those listed in a specific annex, which exclude the nine metals and minerals named in the case.
As a result of other WTO challenges, USTR says that China in April agreed to scrap some export subsidies and the United States won a ruling against Chinese import duties on certain U.S. high-tech steel products.
Meanwhile, the U.S. Commerce Department has imposed steep anti-dumping and anti-subsidy duties on a range of Chinese steel products.
Chinese state media website CRIenglish.com on Wednesday quoted the Ministry of Commerce as saying it will file its own WTO challenge against an “unreasonable” U.S. finding on Chinese steel subsidies, signaling that trade tensions between the two largest economies will continue to rise.
In the raw materials challenge, the amounts of the imports of the individual minerals in some cases are relatively small, but they have a big impact on industries, Obama administration officials said.
For example, they said graphite imports from China were about $24 million last year, but the mineral is not produced in the United States and is a key ingredient in brake linings, an industry which supports 20,000 U.S. jobs, and in lithium ion batteries for electric cars.