US confirms China has ended tax breaks for domestic airplanes

US confirms China has ended tax breaks for domestic airplanes
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The Obama administration said Tuesday that China has ended tax breaks benefitting its domestically produced aircraft over those of U.S. manufacturers. 

U.S. Trade Representative Michael FromanMichael B.G. FromanUS trade rep spent nearly M to furnish offices: report Overnight Finance: Trump hits China on currency manipulation, countering Treasury | Trump taps two for Fed board | Tax deadline revives fight over GOP overhaul | Justices set to hear online sales tax case Froman joins Mastercard to oversee global business expansion MORE said Beijing has rescinded a policy that exempted certain types of its own aircraft, generally those under 25 metric tons by weight, including business jets, from a 17 percent value-added tax while imposing the tax on imported aircraft.

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“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,” Froman said.

"Our proactive efforts in this case put a spotlight on this problem and prompted China to remove the secrecy that obscured this policy," he said.

The United States challenged the tax exemptions at the World Trade Organization (WTO).

Froman said that China did not publish the tax exemptions or the official documents that ended them at the time, as required by its WTO commitments.

"As this case highlights, not only has China continued to maintain illegal market distorting policies since it joined the WTO, its policies are too often hidden behind a wall of secrecy," said Sen. Ron WydenRonald (Ron) Lee WydenCongress can retire the retirement crisis Dems accuse White House of caving to Trump's 'ego' on Russian meddling The difference between good and bad tax reform MORE (D-Ore.).  

"That must stop," Wyden said.

Congressional lawmakers hailed the news as a win for the U.S. aviation industry.

House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyCongress can retire the retirement crisis Social Security won't be able to fund full payouts by 2035 Treasury to miss Dem deadline for Trump tax returns MORE (R-Texas) called the announcement "a huge victory for American aerospace workers and another example of how our nation wins when we rigorously enforce our trade agreements."

Since 2009, the Obama administration has brought 23 enforcement actions at the WTO, including 14 challenges against China. The United States has won every single one of those complaints that has been decided so far.