WASHINGTON—US President Barack Obama is facing a fresh trade row with Beijing that could inflame the 2016 election race and complicate his farewell visit to China in September.
Beijing is pressing Obama’s administration to treat China like a “market economy,” a move that would spell lower tariffs on controversial Chinese exports like steel.
The issue lit up the 2016 campaign trail Monday, when Obama’s Democratic heir apparent Hillary Clinton appeared to challenge the White House to deny China’s demand.
“I have made this clear, I’m going to say it again and I hope the press writes it so people in the administration see it, I am dead set against making China a market economy,” Clinton told steel workers in Kentucky.
“They don’t follow the rules and they don’t play by the rules,” she said, echoing the longstanding allegations that China hurts US jobs and businesses by dumping goods on the market below cost.
The Chinese government denies such actions and has fought back against waves of US and European retaliatory tariffs.
Now Beijing is opening a new front, challenging the unfavorable and arcane way those tariffs are calculated for non-market economies suspected of dumping goods.
China argues its 2001 deal to join the World Trade Organization dictates that from December 11 the United States must change.
“We anticipate all WTO members to fulfill their treaty obligations on time, not to distort or delay its implementation,” Zhu Haiquan, a spokesman for the Chinese Embassy in Washington, told AFP.
Few trade partners would argue China is a fully fledged market economy, but even fewer want to pick a fight with the world’s second largest economy.
Smaller nations like New Zealand and Singapore have already granted China market economy status ahead of the December crunch point.
The Obama administration insists its determination will be quasi-judicial, based on established Commerce Department criteria.
“Nothing in China’s protocol of accession requires that WTO members automatically grant China market economy status later this year,” a Commerce official told AFP on condition of anonymity.
The official said that instead, China would have to “request a review of status” in the context of a specific dispute.