US tackles China subsidies at WTO

Washington tried to resolve the dispute bilaterally but failed, US Trade Representative Susan Schwab said.

She says China uses tax legislation to "encourage exports and discriminate against imports", and called for a "level playing field".

The move comes as the US trade deficit with China is at a record high.

Distortion

Ms Schwab said: "China's subsidies can particularly distort trade conditions for small and medium-sized American enterprises and their workers."

US companies should be allowed to compete fairly with Chinese firms, she added.

US lawmakers and manufacturers have urged the administration to do more to force China to its trade practices, including subsidies on a range on items from steel to paper.

With Chinese goods being relatively cheap, they become more attractive than US items.

By requesting a consultation with the WTO, the US is starting the first phase of a legal complaint.

A drawn out litigation process could start, and take more than a year to reach resolution.

The move follows a case brought in 2006 by the EU, Canada and the US over Chinese tariffs over car parts. That case is still unresolved.

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