WTO rules China's duties on US cars after federal bailout broke trade rules

China violated global trade rules with duties on cars imported from the United States, the World Trade Organisation said in a ruling that added to mounting commercial tensions between the world's two largest economies.

China improperly imposed tariffs on imported vehicles, including those made by General Motors and Chrysler, the WTO ruled in a decision issued yesterday. China added the duties in 2011, after the US government bailed out car makers during the global financial crisis, and eliminated them in December.

"This is a significant victory," US Trade Representative Michael Froman said. "It's time for China to change the practices that have led the United States and our trading partners to bring these kinds of cases."

The US last week escalated the trade battle with China, accusing five military officers of stealing corporate secrets. The indictments follow complaints over issues such as tyres, chicken parts, clean-energy products and credit-card payment services.

The Chinese embassy in Washington claimed victory on technical aspects of the case.

"We noticed that the panel report rejected part of the United States' argument that China failed to define the domestic industry," said spokesman Geng Shuang.