The WTO agreed with complaints by the US, EU and Canada that China violated trade rules with tariffs placed on auto parts.

The three complainants said the surcharge, equivalent to the tariff on imports of complete cars, exceeded China’s permitted tariff ceiling for car parts and broke WTO rules. The duty on complete cars is typically 25 per cent, compared with about 10 per cent for car parts. Beijing claimed the surcharge was necessary to prevent circumvention of the car duty by importing large chunks of vehicles for local assembly.

China will appeal this decision and delay the ruling which would cause them to change the tariff in question or face trade sanctions.

Additional interesting statistics:

- China’s $19bn (€12bn, £9.5bn) vehicle market is the world’s third largest after the US and Japan

- China’s exports of vehicles and parts jumped 45 per cent last year to $41bn

- China’s imports of vehicles and parts rose 25 per cent in 2007 to $26bn

- China’s export sales of car parts reached $2bn in 2007

I should add that this is China’s first official legal defeat involving the WTO since they joined in 2001.