Chinese Auto Subsidies: Hypocrisy from the Obama Administration

Filed under America, Asia
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By Bryan Riley

September 17, 2012

The Obama Administration recently filed a case with the World Trade Organization, alleging that China provided at least $1 billion in subsidies to Chinese carmakers from 2009 to 2011.

WASHINGTON, DC – SEPTEMBER 20: U.S. Trade Representative Ron Kirk speaks as he announces a trade enforcement action against China September 20, 2011 in Washington, DC. Kirk announced that the U.S. has filed a case against China before the World Trade Organization on China’s imposition of duties on imports of American chicken products. (Image credit: Getty Images via @daylife)

On the same day, The Wall Street Journal reported that if the government sold its 26.5 percent stake in General Motors, it would lose $15 billion.

Here is the Obama Administration on China’s auto subsidies: “China’s subsidies distort trade conditions for auto and auto parts manufacturers in the United States by providing an unfair advantage to China’s auto and auto-parts industries.”

Here is the Obama Administration on U.S. auto subsidies: “When the President took office, the American auto industry was shedding jobs by the hundreds of thousands and GM and Chrysler faced the possibility of liquidation – which would have caused at least 1 million more jobs to be lost. The President made the tough choice to help provide the auto industry the temporary support it needed to grow and prosper.”

What’s behind this apparent double standard on subsidies?

Cameron Seward, Research Associate in Government Studies, contributed to this post.

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