U.S. files WTO semiconductor complaint against China

U.S. files WTO semiconductor complaint against China

The United States filed a complaint against Chinese trade practices at the World Trade Organization for what it claims are unfair taxes against foreign-made semiconductors.

The complaint comes as the political climate heats up stateside regarding outsourcing and U.S. trade policy with China.

At issue is China's tax on imported semiconductors, which account for 80 percent of China's integrated circuit market, and at $19 billion, is the world's third-largest.

U.S. exports of integrated circuits to China were $2.02 billion in 2003. US exports of integrated circuits to China are subject to a 17 percent value-added tax, costing approximately $344 million.

"U.S. manufacturers of semiconductors and other products have a right to compete on a level playing field with Chinese firms," said U.S. Trade Representative Robert Zoellick in a statement. "As a WTO member, China must live up to its WTO obligations; it cannot impose measures that discriminate against U.S. products. We have been pressing these and other concerns with the Chinese," he said. "These discussions will continue because we prefer compliance rather than litigation. However, the bottom line is that China is discriminating against key U.S. technology products, it's wrong, and it's time to pursue a remedy through the WTO."