US brings WTO case against Chinese tax on aircraft imports

WASHINGTON (AP) – The United States is bringing a case against China to the World Trade Organization, protesting that taxes on imported aircraft give Chinese manufacturers an unfair advantage.

“China’s discriminatory, unfair tax policy is harmful to American workers and American businesses of all sizes in the critical aviation industry, from parts suppliers to manufacturers of small and medium-sized aircraft,” U.S. Trade Representative Michael Froman said Tuesday.

The U.S. says that China imposes a 17 percent tax on imports of smaller aircraft, including propeller-driven general aviation aircraft, business jets and some jets that fly regional routes, and that Chinese-made planes are exempt from the tax in violation of WTO rules. Among the Chinese aircraft benefiting is the ARJ21, China’s first homegrown regional airliner, which is being built by the state-owned Commercial Aircraft Corporation of China.

The Obama administration is requesting consultations with China over the issue at the WTO. That’s the first step in a process that could lead to the WTO assigning a panel to rule on the case.

“China is firmly committed to the WTO rules and regulations,” said Zhu Haiquan, spokesman at the Chinese embassy in Washington. “We hope the trade disputes can be properly dealt with under WTO dispute settlement mechanism.”

The news comes as the administration pushes Congress to approve the Trans-Pacific Partnership, an ambitious trade deal involving the United States and 11 other Pacific Rim countries.