• Jun 1, 2006

Officials from the US and European Union have been prompted to file a complaint against China with the World Trade Organization (WTO), alleging that the up-and-coming Asian country has been manipulating taxes and tariffs on imported auto parts in an attempt to provide protection for domestic Chinese auto manufacturers.

China was to ramp down its protectionist efforts on auto parts as a condition of joining the WTO, and for the most part, tariffs and taxes on vehicles and auto parts have steadily dropped over the last four years. Tariffs on imported vehicles remain higher than those on components, however, which leads companies such as Cadillac to import "knock-down" kits of components that are then assembled into complete vehicles on the mainland. China claims that such actions are merely efforts to get around the higher tariffs on complete vehicles (well, duh), and is now looking to tax such component kits at the same rate as completed vehicles.

How this whole story will play out - and what effect it will have on foreign companies who do business in China - is yet unknown, but it seems clear that we'll have several years before anything resembling "free" or "fair" trade takes place between China and the West.

[Source: Detroit News]



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  • 13 Comments
      • 8 Years Ago
      The Chinese hate the Japanese. This is very nice in an understated Asian sort of way.
      • 8 Years Ago
      Who wants a to support a government who points missles at a legitimate and independent state? And threatens America's national security with Military buildup? Money = Votes and the Chinese will certainly not have my vote, unless there are big changes.
      • 8 Years Ago
      How many of you fools (er...sheep), who are opposed to China's lack of human rights, shop a Wal-Mart, or own a Lenovo laptop PC (formally IBM Thinkpad).
      Wake up...America is for sale.
      • 8 Years Ago
      America has been for sale many years ago. First Japan, now China.

      • 8 Years Ago
      Fabulo, you nailed it completely.
      The sad thing is, the U.S. and it's many companies doing business in China, refuse to wake up to this. The Chinese will soon start exporting cars to the world at prices the Koreans can only dream about...much less the Europeans and us Americans. The next high dollar product this country will work to get ahold of? Aircraft. They are already working at becoming a world supplier of commercial rockets.
      • 8 Years Ago
      What a shocker. I really thought China was playing nice with everyone else. After all, they have all interests in being nice to others, because of all the pressure we put on them to be good, responsible world citizen.

      It's not like China is ruled by a communist dictatorship, with all the advantages that comes with: lack of corruption, strict enforcement of fair laws and rules, respect of human rights.

      Did I just say that? What's the trade deficit with China again? Who keeps giving them our dollars and euros? Yeah, they have such a good incentive to play nice...
      • 8 Years Ago
      rules are created to be played around with, every country plays around with rules. Don't say it like it's something China invented.
      • 8 Years Ago
      wait, a country is playing with the rules to their advantage...unheard of...should we crusade for human rights or money...human what?
      • 8 Years Ago
      If the U.S. and EU don't keep their word about tariffs on Chinese imports, why should China?
      bill
      • 8 Years Ago
      WHO CARES! - China is just copying what Japan does - and that worked out great for their auto industry- high tariffs, complicated rules that stop foreign cars from importation, loyal citizens who understand that buying from their own country is best, huge state subsidies for the auto industry, currency manipulation, break all anti-trust rules, direct govt investment in technologies, ie hyrbid powertrains....
      • 8 Years Ago
      You mean the country that requires a company to work with a partner Chinese company in order to sell vehicles, and does little to deter copies of products may be playing with currency to their advantage? I would say if they could figure it out, it's happening.
      gbh
      • 8 Years Ago
      As Richard noted, is there really a question?

      Every government plays these games, it is the nature of international trade. Always has been, always will be.


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