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Trade: U.S. intensifies auto spat with China

The U.S. escalated an ongoing trade skirmish with China this week, pushing the issue of auto exports onto the presidential campaign trail, said Howard Schneider and Amy Gardner in The Washington Post. The U.S. filed a complaint with the World Trade Organization alleging that China unfairly subsidized its auto and auto-parts manufacturers with at least $1 billion of improper assistance between 2009 and 2011. President Obama announced the move on a campaign stop in Ohio, a battleground state with tens of thousands of jobs in the auto-parts industry, and characterized the case as an attempt to level the global playing field for U.S. manufacturing.

Rhetoric aside, the case will have “little immediate impact on jobs and companies” in the U.S., said Keith Bradsher in The New York Times. WTO cases typically take a year and a half to resolve, and disputes over subsidies often end “with the losing country simply abandoning the offending policy.” Still, filing the complaint is one of the few legal responses available to the U.S. And since the WTO case targets Chinese automotive subsidies regardless of whether the exports are headed for the U.S., a win may help American auto manufacturers not only at home, but also in overseas markets.

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Autos: U.S. unwilling to unload GM stock

General Motors wants to be free of its government owners, said Jeff Bennett and Sharon Terlep in The Wall Street Journal. GM executives are pushing the Treasury Department to sell its remaining 26.5 percent stake, saying that the stigma of being known as “Government Motors” is hurting the company’s reputation and ability to recruit talent. But the government is reluctant to part with its 500 million GM shares, because a sale at GM’s current price would mean a $15 billion loss for taxpayers.

Economy: Corporate profits booming no more

Soaring corporate profits are showing signs of faltering, said Nelson D. Schwartz in The New York Times. FedEx and Intel, “two bellwethers of the global economy,” have warned that their quarterly earnings will fall short of expectations because of weak global demand. British luxury brand Burberry, which seemed “immune to a slowdown,” also recently announced its worst sales growth since the financial crisis. Overall, “Wall Street expects quarterly profits at the typical large U.S. company to decline for the first time since 2009.”

Companies: ‘Pink slime’ at center of defamation suit

A large U.S. meat producer is suing ABC News for calling its beef additive “pink slime,” said Chet Brokaw and Grant Schulte in the Associated Press. South Dakota–based Beef Products Inc. is seeking $1.2 billion in damages, claiming the network misled consumers into believing the beef trimmings are unsafe. Company officials blame media coverage for a steep drop in demand for the product, prompting the closure of three plants and 700 layoffs. Defamation experts said the case will be difficult for BPI to win, because it must prove ABC “knowingly published false information and intended to harm its business.”

Mergers: Mega defense deal faces hurdles

A proposed merger to create the world’s biggest aerospace and defense company is facing tough scrutiny by European Union regulators, said Foo Yun Chee in Reuters.com. The marriage of the U.K.’s BAE Systems and EADS, which is based in France and Germany, would create a defense giant worth roughly $50 billion. But both investors and government officials are wary, in part because of regulatory hurdles and conflicting national security priorities. The Pentagon, a major BAE customer, has also expressed reservations.