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Statement by U.S. Trade Representative Michael Froman on Chinese Policies Related to U.S. WTO Victory on Rare Earth Elements

Chief United States trade official praises change in highly trade-distortive Chinese policies following U.S. WTO victory, underscores the Obama Administration’s successful record of trade enforcement cases

Washington, D.C. – Last year, the United States and several partners achieved a major victory at the WTO against restrictive, illegal Chinese policies that hiked costs for Americans by up to 300 percent on exports of rare earths, tungsten and molybdenum, which are used as key components in a large number of U.S-made products for critical American manufacturing sectors, including hybrid car batteries, wind turbines, and energy-efficient lighting.

Now, China has announced that as of May 1, it has eliminated these WTO-inconsistent export duties.  Earlier this year, China ended its WTO-inconsistent export quotas on these same products.  The United States, the European Union, and Japan had successfully challenged China’s export duties and quotas as contrary to WTO rules, delivering a major enforcement victory.

“The Obama Administration is committed to fighting for American workers and standing up for our rights,” said U.S. Trade Representative Michael Froman. “We’ve shown once again that vigorous trade enforcement can and does produce real results.  The Chinese duties and quotas that will now stop had forced American manufacturers to pay as much as 300 percent more than what their Chinese competitors pay for the same materials. We will be closely monitoring China’s actions to ensure that these illegal policies are in fact discontinued and that China fully complies with its obligations.”

BACKGROUND   

In August of last year, the World Trade Organization (WTO) agreed with the United States in a major dispute, finding in favor of U.S. claims that China’s imposition of export quotas and duties on rare earths, tungsten, and molybdenum breached WTO rules.   Rare earths, tungsten, and molybdenum are key inputs in a multitude of U.S-made products for critical American manufacturing sectors, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals.  This WTO victory follows another successful U.S. challenge at the WTO in 2012 on China’s trade-distorting export restraints affecting nine other key raw materials.  China announced that it had removed the export quotas and duties on those raw materials in 2013. 

To view a fact sheet detailing the Obama Administration’s successful record on Trade Enforcement, please click here