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President Obama says China can't 'skirt' trade rules

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WASHINGTON (AP) - President Barack Obama warned China Tuesday that it would not be allowed to gain a competitive advantage in world trade by "skirting the rules."

White House brings new trade case against China (photo: Philip Jägenstedt via Flickr)

Making an election-year pitch aimed at working people, Obama announced that Washington was bringing a new trade case against Beijing. The goal is to pressure the rising Asian economic power to end its restrictions on exports of key materials, known as rare earth, which are used to manufacture hybrid car batteries, flat screen televisions and other high tech-goods.

"If China would simply let the market work on its own, we'd have no objection," Obama said during remarks in the White House Rose Garden. "But their policies currently are preventing that from happening. And they go against the very rules that China agreed to follow."

The U.S., working in conjunction with the European Union and Japan, asked the World Trade Organization Tuesday to facilitate talks with China over its curtailment of exports of rare earth minerals.

"When it is necessary, I will take action if our workers and our businesses are being subjected to unfair practices," Obama said.

With the U.S economy slowly recovering from recession, Obama has sought to bring a renewed focus on Chinese policies that could hinder U.S. expansion. His administration's posture on China has already surfaced in the run-up to the November elections, with Republican front-runner Mitt Romney criticizing Obama for refusing to cite China for manipulating its currency. Romney has said he would label China a currency manipulator on his first day in office, a move that could lead to trade sanctions against Beijing.

The WTO, the only global international organization dealing with the rules of trade between nations, has sided with the U.S. in previous trade disputes with China.

In 2009 the Obama administration imposed a three-year tariff, starting at 35 percent, on U.S. imports of low-grade Chinese tires. The tariff was approved after imports of those tires rose threefold to about 46 million tires between 2004 and 2008. Last year the WTO rejected an appeal from China and found that the United States acted consistently with its obligations in imposing the duties.

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