U.S. to bring trade case against China

March 13, 2012

The President Barack Obama administration is again supporting American manufacturing, as the White House is looking to push a new trade case against China that looks to pressure the Asian superpower to end its export restrictions on key materials used by companies in the U.S., The Associated Press reported.

According to the news outlet, the new trade initiative is another effort by the administration to level the playing field for American companies, especially those that manufacture hybrid car batteries, flat-screen televisions and other high-tech goods.

Senior Obama administration officials noted that the U.S. will ask the World Trade Organization (WTO) to facilitate talks with China over its limitations on exports of rare earth minerals.

The AP reported that America is bringing the case to the WTO along with the European Union and Japan. After Obama pushed the initiative, the EU announced its participation in the case. In Brussels, Belgium, EU Trade Commissioner Karel De Gucht said China's restrictions "hurt our producers and consumers in the EU and across the world."

According to the news outlet, the new action by President Obama is part of an effort to crack down on what his administration has noted is unfair trading practices by China that have put American companies at a competitive disadvantage.

China has an alleged monopoly on the global supply of 17 rare earth minerals that are essential for making high-tech goods. These, the AP reported, include hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, smartphones and camera lenses.

The materials also are used in the manufacture of tiny motors, such as those used to raise and lower car windows and in consumer electronics, putting American and European manufacturers at a disadvantage in terms of pricing and affecting business strategy for these companies.

The Wall Street Journal reported that the Chinese currently produce more than 95 percent of the world's rare earth minerals.

According to the newspaper, Obama recently welcomed the Chinese vice president on his visit to the U.S., but noted that China needs to adhere to international economic and business standards.

The Journal reported that the main problem with the Chinese, and what the U.S. and EU are looking to adjust, is how they force international prices of the metals to a point that is much higher than what they pay domestically. This gives their manufacturers and businesses a distinct advantage.