The Obama administration will file a complaint today with the World Trade Organization (WTO), alleging that China has illegally subsidized automotive exports and undercut American suppliers, CNNMoney reported.
The complaint accuses China of providing $1 billion in illegal subsidies to auto and auto parts exporters between 2009 and 2011, according to a senior administration official.
The administration says the benefits provided to Chinese companies violate a WTO prohibition on "export-contingent subsidies."
Chinese cars are not yet common in the United States, but exporters have managed in recent years to quickly ramp up their shipments of auto parts to the world's largest economy America.
The White House estimates that up to 60 percent of China's automotive industry exporters benefit from the subsidies, making it hard for U.S companies to compete.
In a related case, the administration launched a complaint against China with the WTO in July over $3 billion in duties Beijing placed on U.S. auto exports, CNNMoney said.
China responded by filing a complaint of its own, challenging a new U.S. law that allows duties on subsidized goods from China, Reuters reported.