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What They're Saying: U.S. Launches Trade Enforcement Case Challenging China’s Hidden and Discriminatory Tax Exemptions for Certain Chinese-Produced Aircraft

Below are reactions to U.S. Trade Representative Michael Froman’s announcement this morning that the United States has initiated dispute settlement proceedings at the WTO regarding discriminatory tax measures exempting certain aircraft produced in China from the country’s value-added tax (VAT) despite imposing those same taxes on imported aircraft, impacting Made-in-America aircraft exports.

 

MEMBERS OF CONGRESS

U.S. Sen. Ron Wyden, Finance Committee Ranking Member: “As Congress works to rewrite the playbook on trade enforcement, I am glad to see USTR take action to address nontransparent and discriminatory Chinese tax policies that keep American manufacturers from competing on a level playing field.  Today’s actions underscore the need to swiftly bring into law a customs package with strong, effective enforcement tools to protect American jobs and priorities.”

U.S. Rep. Sandy Levin (D-MI), Ways and Means Committee Ranking Member: “Today’s action is a positive effort that underscores the ongoing and critical need to enforce our trade agreements. The benefits of job creation and export growth promised by our trade agreements can only happen when all parties play by the rules. We must ensure that our trading partners follow through with the promises they make, and take the necessary steps when they don’t. In a case like today’s, where China – the world’s second largest economy and the country with which we have our largest trade deficit – bolsters the development of its domestic aircraft industry through discriminatory taxes, it is the responsibility of the United States to its workers and businesses to act.”

U.S. Rep. Rick Larsen (D-WA): “USTR’s decision to bring this case sends a strong and important message that the U.S. will not tolerate activities that put our workers and the businesses that employ them at an unfair disadvantage. Leveling the playing field is exactly why we have the World Trade Organization and rules of the road for international trade…Small and medium-sized airplane manufacturing is a job-creating industry for the United States. General aviation manufacturing supports 102,600 jobs in the U.S. and contributes $14 billion to our economy each year. Washington state is home to hundreds of aviation manufacturing suppliers, who make and sell parts to general aviation and regional jet manufacturers. These jobs suffer when countries like China subsidize their own products. I am pleased to see USTR holding the Chinese government accountable, and I hope to see more cases like this to make sure our workers get a fair shot.”

U.S. Rep. Pat Tiberi (R-OH), former chairman of the House Ways and Means Subcommittee on Trade: “The Chinese government is undermining fair competition and playing by their own set of rules. Punishing American small and medium sized aircraft and aircraft component manufacturers is a direct violation of WTO commitments, and I commend Ambassador Froman for announcing this enforcement action…Fully enforceable trade commitments are essential to ensuring American-made products can compete on a level playing field around the world.  In addition to actions like the one Ambassador Froman is taking today, it is important that we send my bill, the Trade Facilitation and Trade Enforcement Act, which gives Customs and Border Protection stronger tools to enforce our trade laws, to the president’s desk as soon as possible. This is about protecting American workers from unfair treatment and increasing American competitiveness in the global marketplace.”

U.S. Rep. Dave Reichert (R-WA), chairman of the House Ways and Means Subcommittee on Trade: “Global trade has helped create countless jobs here in the United States…With a strong trade agenda, we have the potential to continue growing these jobs and expand opportunities for businesses. However, the success of our global trading system depends on transparency and strong enforcement. Each partnering country must play by the same rules. Today's case is an important confirmation that enforcement matters.  At the same time, I will continue working through the customs conference committee to give USTR even more enforcement tools. I am committed to working with Ambassador Froman, USTR, and my fellow Members of Congress to ensure that our exporters are treated fairly.”

U.S. Rep. Derek Kilmer (D-WA): “I applaud the Ambassador's efforts to ensure that China plays by the rules…We are in a global competition and we need to ensure that manufacturing businesses and workers on our shores are able to compete on a level field.”

 

LABOR UNIONS

United Auto Workers: “Today the U.S. Government took a strong stand with the WTO to protect U.S. jobs by exposing the unfair and concealed advantage of Chinese aircraft companies over sales of American aircraft and aircraft parts in China….This policy is aimed squarely at the U.S. aviation industry which has provided $580 million in small aircraft to China and over $5 billion in sales of aviation components in the past three years. We commend the Obama Administration for taking this action and urge the Chinese government to institute a consistent policy immediately.”

United Steelworkers (USW) International President Leo W. Gerard: “China has targeted industry after industry with unfair and often secret subsidies. America’s aerospace industry, one that widely supports manufacturing jobs all across the country, is yet another example. Tens of thousands of USW members working in the aluminum, steel, glass and tire sectors produce and supply materials and parts used in the domestic aerospace industry. The USTR’s actions are a critical part of a strategy to maintain U.S. leadership in this vital sector.”

International Association of Machinists and Aerospace Workers (IAM) President Tom Buffenbarger: “China utilizes every tool available to establish a strong aerospace industry, including other market distorting mechanisms like demanding that U.S. companies transfer production and technology in return for sales…The action today is a step in the right direction to leveling the playing field among the world’s aerospace companies and their workers. We hope this paves the way for more aerospace exports produced by U.S. workers.”

 

HEADLINES

The Wall Street Journal: “U.S. Brings WTO Case Against China Over Smaller Planes”

Associated Press: “US brings WTO case against Chinese tax on aircraft imports”

Reuters: “U.S. challenges China's tax exemptions for aircraft at WTO”

The Hill: “US trade officials challenging China over aircraft tax policy”

Politico Pro: “U.S. to challenge China aircraft tax at WTO”

Financial Times: “US accuses China over aircraft tax breaks”