* Case follows a plea from United Steelworkers union
* Romney says action 'too little, too late'
* China files counter-complaint against U.S. duties
By Jeff Mason and Tom Miles
CINCINNATI/GENEVA, Sept 17 President Barack
Obama on Monday said the United States was challenging Chinese
auto and auto-parts subsidies that threatened American jobs as
he campaigned in Ohio, an auto manufacturing state that could be
decisive in the November presidential election.
Beijing fired back with a complaint against U.S. duties on
many Chinese exports, in the latest example of trade tension
between the world's two largest economies.
U.S. trade officials said their World Trade Organization
case goes after Chinese government grants and other subsidies
that have helped the Asian giant rise to the fifth-largest auto
and auto parts exporter in 2011, from 16th in 2002.
"These are subsidies that directly harm working men and
women on the assembly lines in Ohio and Michigan and across the
Midwest," Obama told a campaign rally. "We are going to stop it.
It is not right, it is against the rules, and we will not let it
Republicans, including presidential nominee Mitt Romney, who
has accused Obama of not being tough enough with Beijing, cast
the move by the Democratic White House as a blatant effort to
sway votes in an election battleground state.
"Campaign-season trade cases may sound good on the stump,
but it is too little, too late for American businesses and
middle-class families," Romney said in a statement. This was the
second time in recent months that Obama has announced a trade
action against China while in Ohio.
This year, the United States has also pursued anti-dumping
and countervailing duty cases against Chinese-made solar panels
and wind turbine towers in response to industry petitions.
The new case follows pleas from U.S. steelworkers and other
union groups for action to stop what they said was a flood of
unfairly subsidized Chinese auto parts.
It targets cash grants, below-market loan interest rates,
preferential tax treatment and other export-contingent subsidies
provided to Chinese auto and auto-parts manufacturers in
government-designated regions known as "export bases."
Those bases provided at least $1 billion in subsidies to
auto and auto-parts exporters in China during the years 2009
through 2011, U.S. officials said.
"China's exports of auto parts went from roughly $7 billion
in 2002 to almost $70 billion today," a senior administration
official said. "The gist of what we're doing is to make sure
China does not distort the global market ... by frankly flooding
the world with cheap auto parts."
The United States is a major auto and auto-parts
manufacturer, with exports totaling $123 billion last year.
OHIO VERSUS CHINA, ROUND TWO
United Steelworkers President Leo Gerard, whose union
represents about 350,000 workers who make tires, windshields,
steel, plastic and other products that could be used for autos,
hailed the administration's action.
The decision spares the union huge legal fees it would have
to spend to individually bring anti-dumping and countervailing
duty cases against Chinese auto parts imports, Gerard said.
"Even though we've had some disagreements with the president
on trade agreements, there's not been a better friend to working
agreements in enforcing those trade agreements in the last 50
years than President Obama," Gerard said.
Steelworkers estimate the $1 billion in Chinese government
subsidies targeted in the case fuel about 60 percent of China's
auto parts exports, so there might be room for the
administration to bring more cases, he said.
U.S. trade officials also said they are taking the next step
in a separate case filed in July against Chinese duties on U.S.
auto exports by asking the WTO to establish a panel to hear the
That case was also announced when Obama was on a campaign
swing through Ohio.
White House spokesman Josh Earnest denied any political
motivation behind the timing of the administration's latest
complaint. "It's clear that this is a long and consistent part
of the president's record," he told reporters aboard Air Force
One. "These are decisions that are months in the making."
The Obama administration points to eight other cases it has
filed against Chinese trade practices at the WTO, as well as
Obama's decision in 2009 to curb tire imports from China, a move
that Romney has criticized as protectionist.
Meanwhile, Ohio Republican Senator Rob Portman, a Romney
ally, criticized Obama for failing to label China a currency
manipulator in seven semi-annual Treasury Department reports
since he took office in January 2009.
Romney has promised to label China a currency manipulator on
his first day in office and to direct the Commerce Department to
slap duties on goods from countries with undervalued currencies.
The next Treasury Department report is due October 15.
"We need new leadership that is not afraid to name China a
currency manipulator," Portman said.
China's counter-complaint filed on Monday potentially
affects close to 30 products that have been targeted by U.S.
duties, a trade official familiar with the case said.
In a brief statement, the WTO said the products included
steel, tires, magnets, chemicals, kitchen appliances, wood
flooring and wind towers.
In March, the U.S. Congress voted to ensure that Washington
could impose duties on subsidized goods from China and Vietnam,
a move the White House said was needed to protect American
That came after a U.S. court ruling struck down the Commerce
Department's ability to impose anti-subsidy, or countervailing,
duties on Chinese goods on technical grounds.
China's Commerce Ministry hit back against the United States
on Monday for targeting China with anti-subsidy duties.
"China hopes that the United States can correct its mistaken
policy and appropriately resolve China's concerns through WTO
dispute resolution mechanisms and consultations," Commerce
Ministry spokesman Shen Danyang said in a statement.
The Commerce Ministry made no mention of the U.S. decision
to initiate the auto case against China.
A senior Obama administration official said China's move
"was not completely unexpected" and the United States would
vigorously contest the case.
The administration's trade enforcement steps could play well
politically in the U.S. industrial heartland, including in
states such as Ohio that could determine the outcome of the Nov.
Obama holds a narrow lead in polls, but the sluggish economy
and high unemployment rate have weighed on his re-election bid.
Trade cases can take years to litigate at the WTO, so no
decisions are expected before the November election.