The Wall Street Journal: U.S. Launches New Trade Challenge Against China

Feb 11, 2015
In The News

WASHINGTON--The U.S. opened a new front in the long-running trade conflict with China, challenging a broad program Beijing uses to subsidize export businesses.

The new challenge at the World Trade Organization is part of the Obama administration's efforts to step up enforcement of trade rules to win support for its efforts to conclude a new trade agreement with Pacific countries.

President Barack Obama last month warned that the new bloc under negotiation, which includes Japan but not China, is important to prevent Beijing from writing the rules of trade in the Pacific area.

Despite the trade challenges, the White House has emphasized that relations with China are complex,and on Tuesday Mr. Obama spoke by telephone with Chinese President Xi Jinping about issues ranging from climate change to nuclear talks with Iran.

The latest WTO case is similar to a previous challenge of China's subsidies for auto and auto parts. This time, the alleged subsidies come through a system called "demonstration bases," U.S. officials said. California's agricultural trade with China, valued at $1.4 billion, is one of the industries affected by subsidies of Beijing's fruit, vegetable and poultry production, said Rep. Jim Costa in a statement.

"China appears to be giving prohibited export subsidies to companies spanning a diverse group of industries, including textiles, apparel and footwear, advanced materials and metals," Mike Froman, the U.S. trade representative, said Wednesday. "All of these services, provided free or at a discount, undermine fair competition."