Business groups, lawmakers back trade case against China

Congressional lawmakers and business groups praised the Obama administration for launching a new trade enforcement action against China over export duties on nine raw materials needed for manufacturing.

The U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) along with several lawmakers lent their support to  the case filed against Beijing at the World Trade Organization (WTO) for maintaining restrictions on the minerals widely used in the aerospace, automotive and electronics sectors.

{mosads}“The U.S. Chamber of Commerce is troubled by China’s continued use of measures that appear designed to make raw materials more expensive for U.S. companies in a number of critical industries, thus putting them at a disadvantage to Chinese manufacturers, including in aviation, electronics and cosmetics,” said the Chamber’s Myron Brilliant, executive vice president and head of international affairs.

“At a time when trade protectionism is on the rise worldwide and trade is declining, all WTO members should renew their commitment to avoid export restraints,” Brilliant said. 

NAM President and CEO Jay Timmons argued that the export restrictions distort markets, hurt manufacturers worldwide and drive up costs for consumers.

“This is an important step forward that builds on two prior successful cases the administration pursued that eliminated China’s similar restrictions on rare earths and other raw materials to the benefit of manufacturers across many sectors,” Timmons said. 

U.S. Trade Representative Michael Froman said “these duties are China’s attempt to game the system so that raw materials are cheaper for their manufacturers and more expensive for ours.”

“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,” Froman said.

The case represents the 13th trade enforcement case the Obama administration has launched against China at the WTO, more than any other country.

The U.S. has won every case that has been decided so far.

“The U.S.-China relationship is one of the most important global partnerships, but it must be based on the rule of law and enforceable standards,” said Rep. Ron Kind (D-Wis.).

The nine raw materials included in this action are antimony, cobalt, copper, graphite, lead, magnesia, talc, tantalum and tin.

The export duties range from 5 to 20 percent.

Rep. Rick Larsen (D-Wash.), who represents an aerospace heavy district that includes Boeing, also expressed support for the challenge, saying it “is exactly the type of action I had in mind when I helped push for the trade enforcement trust fund last year.”

Senate Finance Committee ranking member Ron Wyden (D-Ore.) also supported the administration’s decision.

“When it comes to trade enforcement, tough talk is easy,” Wyden said.

“I am pleased that the Obama administration is taking this step and hope it continues to use all available trade enforcement tools to tackle other big challenges, including rampant Chinese subsidies to steel, aluminum and other commodities that have driven overcapacity and decimated American manufacturers,” Wyden said. 

Vice President Biden, who will deliver remarks at the Port of San Diego on Wednesday, said about the case that “it all comes down to fair competition, a notion that is fundamental to who we are as Americans.”

“And one of the most important ways we have done that is by enforcing our trade laws more aggressively than any previous administration in history,” Biden said.

“Because here’s what I know — given a level playing field, American businesses and American workers will out-compete anyone. Period.”