The United States filed a claim in the WTO over Chinese subsidies to its car manufacturers today.  Subsidies are okay under the world's trade rules, but subsidies premised on exports are not (i.e., the government gives you 100 RMB for every car you sell in Japan).  It's the second high profile recent WTO case involving the US and China - rare earths is the other - but it has plenty of medium profile company.  China has found, since joining the WTO that a. it was totally worth it, and b. it has become one of the three most most sued nations through that body ever, even though it is pretty choosy about suing back.

Top three?  What does that mean?  Well, the United States has 14 disputes in various stages of litigation against China, according the the USTR's latest report.  It has been sued back four times.  By comparison, the US has 17 disputes in progress with the EU and is defending no fewer than 32 claims made by Europe.

UPDATE: Simon Lester, of the trade-indispensable International Economic Law & Policy Blog, observes that a more accurate way to talk about subsidies would be to say this: "Subsidies that are contingent on export or on the use of domestic inputs are strictly prohibited; other kinds of subsidies may still be challenged, but will only be found in violation if it can be shown that they cause economic harm to foreign competitors."  Point taken!

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