Taking a hardline approach, US President Obama has lodged an official complaint against China for unfair backing of its auto industry.
During a recent campaign tour of Ohio, President Obama launched an official trade complaint against auto parts exports from China, alleging the government gave illegal subsidies for automobiles and auto parts. The timing and location are significant, as Ohio will be a key state in the upcoming presidential election and relies heavily on the auto industry for employment.
The US President will make the case to the world trade body in Geneva, Switzerland, that China provided prohibited subsidies to auto and auto parts producers in 12 designated “export bases” worth over $1 billion (6.3 billion yuan) between 2009 and 2011. Adding insult to injury, Beijing also apparently slapped heavy duties on 92,000 autos and SUVs in December 2011, worth a 20.8 billion yuan ($3.29 billion) in U.S. auto exports.
In Ohio, the auto-parts industry directly employs a staggering 54,200 people, while related industries like steel, aluminium, plastics and electronics support around 12% of the state's total employment. The US trade deficit with China hit a record $295 billion (1.9 trillion yuan) in 2011 and remains a bone of contention between the world's two largest economies.