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TRADE WARS
US Congress approves China subsidy duties
by Staff Writers
Washington (AFP) March 6, 2012


The US Congress voted Tuesday to authorize renewed tariffs on billions of dollars worth of goods from China and other countries considered to be state-run economies, a move aimed at countering unfair subsidies.

The measure approved by lawmakers fixes a tariff scheme in place since 2007 on imports from "non-market economies" that was struck down by a court ruling in December.

With support across party lines, the House of Representatives voted to give such authority back, following a similar vote on Monday in the Senate. President Barack Obama plans to sign the bill.

Representative Dave Camp, a Republican who heads the powerful House Ways and Means Committee, said on the House floor that the measure would preserve an "important tool" for the United States.

"China distorts the free market by giving enormous subsidies to its producers and exporters, and our companies and workers should not be expected to compete against the deep pockets of the Chinese government," Camp said.

Before the court ruling, the Commerce Department said that such countervailing duties were in place against 23 goods from China and one from Vietnam that were worth a total of $4.7 billion in import value a year.

The Obama administration welcomed the swift congressional approval. Vice President Joe Biden said in a statement that Congress "has taken a clear stand against the unfair trade practices that have put countless American jobs in jeopardy."

Representative Sandy Levin, the top member of Obama's Democratic Party on the Ways and Means Committee, said that the vote would help "tens of thousands of American workers who would have had the rug pulled out from under them" by the December ruling by the Federal Court of Appeals.

But Levin, a sharp critic of China's trading practices, said: "It provides no new tools to stop China from creating unfair advantages for its producers or forcing American companies to move to China in order to do business in that market."

"Congress must not use this step as an excuse to forgo future action on those fronts," he added.

The bill does not address the level of China's currency. US lawmakers argue that, despite the yuan's recent appreciation, China keeps the currency artificially low to make its manufactured goods cheaper in export markets.

The House voted 370 to 39 in support of the measure. All of the dissenters were Republicans, with some conservative members arguing that any such tariffs amounted to new taxes.

Some trade proponents say that select Chinese goods are in effect facing two rounds of tariffs as the United States also imposes duties for "dumping," or exporting goods to sell at a rate below that in the home market.

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China denies unfair subsidies after US passes bill
Beijing (AFP) March 7, 2012 - China on Wednesday rejected accusations it unfairly subsidises exports to the United States, after the US Congress voted to renew duties on goods from China and other state-run economies.

The House of Representatives on Tuesday voted to renew a tariff scheme in place since 2007 on imports from "non-market economies" but which was struck down by a court ruling in December.

President Barack Obama is expected to sign the bill after the Senate approved it on Monday.

Chinese Commerce Minister Chen Deming, speaking at a news conference on the sidelines of the country's annual parliamentary session, said the tariffs broke US and international trade rules.

"The central government has no prohibited subsidies," Chen told reporters, accusing Washington of providing help to some of its own industries.

"If any local (government) has subsidies we are willing to talk about this."

Before the court ruling in December, the Commerce Department had imposed countervailing duties against 23 goods from China and one from Vietnam that were worth a total of $4.7 billion in import value a year.

The bipartisan support for the bill is likely to further strain trade ties between Beijing and Washington, which have recently locked horns over vehicles, solar panels, chickens and the value of the Chinese currency.

Last month Obama ordered the creation of the Interagency Trade Enforcement Centre to crack down on what the United States judges unfair practices by its major trade partners, including China.

The agency will come under the office of the US Trade Representative and intensify coordination between multiple agencies, including US intelligence, to enforce US trade rights.

Chen said Wednesday China was "keeping a close watch" on the new agency which he hoped would "work in a very fair, transparent and open manner".



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