China finds that U.S. automakers received unfair subsidies

While many in the U.S. think trade between the home team and China is a one-way street, the truth is that exports to The Land of the Great Wall was worth $91.9 billion in 2010 alone. The auto industry makes up $3.4 billion of that total, as automakers have been making vehicles in the U.S. and shipping them overseas.

That sounds like great news for automakers and the blue-collar workforces who build those vehicles, but China's Commerce Ministry says that some of the American vehicles benefited from unfair subsidies. The ministry issued a statement that U.S. automakers that produce sedans and utility vehicles of 2.5 liters and larger "engaged in dumping and were given subsidies." The term "dumping" details an instance where an automaker will "dump" overflow capacity into another country, which in turns hurts that country's local auto industry. China also alleges that the vehicles in question were given subsidies by by the federal government and the state of Michigan. General Motors, Chrysler and U.S.-built BMW and Mercedes-Benz models were among those cited in the statement.

Despite objections from the Ministry, the Customs Tariff Commission of the State Council has decided not to levy a duty against the automakers for their alleged wrongdoing. China's announcement came within days of the annual Strategic and Economic Dialog meeting.
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