Larsen Applauds Announcement to End China’s Hidden, Discriminatory Tax Exemptions for Chinese-Produced Aircrafts

WASHINGTON, D.C.—Rep. Rick Larsen (WA-02) applauded the administration’s announcement that it has reached a settlement with China to end hidden discriminatory tax exemptions that had benefited certain types of aircraft produced in China, which is prohibited under the World Trade Organization (WTO) rules.

"The United States has brought 14 trade enforcement actions against China since 2009, and every time our country has gone to bat we have won," said U.S. Congressman Rick Larsen, the ranking member on the House Subcommittee on Aviation. "Today's decision is a win for the tens of thousands of workers in my District whose jobs are directly tied to the aviation industry and international trade, and whose livelihoods are threatened when foreign entities artificially advantage one country over another."

“While we are happy to announce this discrimination has ended, we remain deeply concerned about China’s lack of transparency on taxes affecting American products,” said Ambassador Froman. “Transparency is a core obligation in the international trading system. China should not impose discriminatory taxes or conceal them. Our proactive efforts in this case put a spotlight on this problem and prompted China to remove the secrecy that obscured this policy.”

More information about the case USTR is bringing is available here.

China’s policy exempted certain aircraft produced in China from a 17 percent value-added tax.  But it imposed those taxes on imported aircraft, including products manufactured in the United States, impacting U.S. aviation workers. The Office of the U.S. Trade Representative brought the dispute to the WTO, and China subsequently agreed to end this practice.

Since 2009, when President Obama took office, the U.S. has filed 23 enforcement complaints with the WTO, more complaints than any other WTO member. The United States has won every one of these disputes decided thus far.

Larsen has championed efforts to hold other countries accountable when they engage in unfair trading practices. In 2010, Larsen urged U.S. Trade Representative Kirk to hold the EU accountable for illegally subsidizing Airbus. Last year he pushed for legislation which created a Trade Agreements Enforcement Trust Fund to pay for enforcement actions against other countries that break trade rules.