Legal Auto War Between China and US Heats Up – The legal war over Chinese subsidies for their auto industry and auto parts industry hotted up with President Obama saying the US was challenging the subsidies China uses and which threaten US auto jobs.

Reuters reported the remarks from President Obama who was campaigning in the auto-industry state of Ohio.

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 stand.”

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.”

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