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U.S. Filed WTO Complaint over Chinese Tax Benefits for Domestic Airplanes

Well-known Chinese news site Sina recently reported that the United States filed a WTO complaint against China because of the tax exemptions the Chinese government offered to certain domestically manufactured airplanes. The United States accused the Chinese government of tax discrimination, which violates WTO rules. U.S. Trade Representative Michael Froman said that China charged a 17 percent value-added tax (VAT) on imported airplanes under 25 tons. However, Chinese made airplanes such as the ARJ21 enjoyed an exemption. Froman explained that this unfair taxation damaged key U.S. airplane manufactures as well as workers in that industry. The damages also impacted a wide range of airplane parts suppliers in the United States. He especially accused the Chinese government of not publishing the names of the Chinese manufacturers receiving the tax benefits, explaining that this obviously violated the WTO transparency principle. The ARJ21 is China’s first domestically manufactured regional jet model, designed mainly to compete against Brazil’s Embraer and Canada’s Bombardier.
Source: Sina, December 8, 2015