Remember how Cadillac is having trouble selling more than 3,000 vehicles a month in China, the world’s biggest car market? Well, that’s due to the tariffs imposed on cars that were not made in China, as the duty put most of Cadillac‘s American-made lineup at a pricing disadvantage in the Land of the Red Dragon. For its part, GM is actively working to solve the dilemma by building plants in China that would produce Caddys for the local market… but the U.S. government thought it could help out in the short run by filing an official complaint with the World Trade Organization questioning the level of the tariffs, which mostly affect The General (as well as Chrysler).
According to a White House statement on the grievance, about 80 percent of American-built vehicles (valued at $2.9 billion a year) exported to China will be levied with the import tariffs that could cause the price of a luxury vehicle to escalate as much as 21.5 percent. And it’s this, in particular, that U.S. President Barack Obama finds unfair:
“Americans aren’t afraid to compete; we believe in competition. As long as we’re competing on a fair playing field, instead of an unfair playing field, we’ll do just fine,” said President Obama.
In response, the Chinese commerce ministry wrote in a statement that China will “appropriately” deal with the latest complaint according to the WTO’s dispute settlement process. The WTO procedures call for both governments to hold talks for a minimum of two months in order to resolve the dispute. If the talks don’t result in an agreement, the U.S. government may ask WTO judges to make a judgement.