Washington has filed a new complaint against Beijing with the World Trade Organisation and in turn China has done the same.
It comes as President Barack Obama and his challenger Mitt Romney continue to talk tough on the emerging world power, ahead of elections in November.
Correspondent: Auskar Surbakti
Speakers: John Lee, Associate Professor, University of Sydney, Barack Obama, US president; Mitt Romney, US presidential candidate; Tom Switzer, United States Studies Centre, University of Sydney
SURBAKTI: Relations with China have featured prominently on the presidential campaign trail in the United States. Both Barack Obama and Mitt Romney are accusing each other of not being tough enough against Beijing.The Republican candidate has accused the US President of not standing up to the world's second largest economy.
ROMNEY: "I think it would be appropriate if the President would talk to China in a straight-talk manner. They have manipulated the currency, for well over a decade, they've taken American jobs, and I think it's totally appropriate to show backbone and strength as we deal with other nations around the world. Nothing wrong with telling people the truth."
SURBAKTI: But Barack Obama has hit back on his latest campaign stop in Cincinnati, Ohio.
OBAMA: "He's been running around Ohio, claiming he's going to roll up his sleeves, and take the fight to China. His experience has been owning companies that were called pioneers in the business of outsourcing jobs to countries like China. Now Ohio you cant stand up to China when all you've done is send them our jobs. You can talk a good game but I like to walk the walk, not just talk the talk."
SURBAKTI: And to prove that he's 'walking the walk', Mr Obama has announced that he's made another complaint to the World Trade Organisation against China, this time accusing it of illegally subsidising car exports. Washington now has 10 cases against Beijing at the WTO. Speaking in Ohio, which is a manufacturing state that could be a decider in the November election, Mr Obama has talked-up his actions against China.
OBAMA: "We brought more trade cases against China in one term than the previous administration did in two. My administration is launching a new action against China. These are subsidies that directly harm working men and women on the assembly linesin Ohio and Michigan and across the Midwest. And we are going to stop it. It is not right. It is against the rules. And we will not let it stand."
SURBAKTI: Soon after he revealed his plans, China responded with its own complaint to the trade body, saying the US has unfairly applied tariffs on two dozen Chinese export products. But some analysts say Barack Obama's latest actions are purely political. Tom Switzer is a research associate at the United States Studies Centre at the University of Sydney.
SWITZER: "Well I think this just reflects a long trend in American politics. We've had many Republicans and Democrat politicians bagging China, particularly on the trade front. When they're in office, very rarely do they put into practice their tough, hawkish language on trade protectionism.
SURBAKTI: Other experts say America's grievances are more than just political manouvres. John Lee, is an expert on China at the Hudson Institute in Washington who's currently at the University of Sydney.
LEE: "The timing of this WTO action is politically motivated by the Obama camp but the issues are still substantive. We still have to sort out the issue of China not playing by the rules it signed up to."
SURBAKTI: America's latest complaint comes amid ongoing calls for China to allow its currency to strengthen and reflect its true value. Both Barack Obama and Mitt Romney say they'll keep on pushing Beijing on the issue, while pledging to maintain a good relationship with the country. John Lee from the University of Sydney doesn't believe the tit-for-tat complaints will damage relations between the United States and China.
LEE: "I know it looks veyr ugly and I know there's a lot of loud noises being made but this has been brewing for a while. They have brough each other to the WTO a number of times I think 16 times by my count and this is really just part and parcel of two countries very harshly negotiating the terms of its trade relationship."