China Reacts to U.S. Tire Tariff

Lodges WTO complaint

China hauled the U.S. to the World Trade Organization on Sept. 14 over what it alleged were unfair tariffs imposed by Washington on Chinese tire imports.

"The United States has adopted protective measures against Chinese tires shipped to the United States. This is a violation of WTO rules," said Chinese Commerce ministry spokesman Yao Jian.

Amid warnings that a surge in Chinese-made tires had cost more than 5,000 jobs in the U.S., President Barack Obama on Sept. 11 imposed punitive duties of 35% on the Chinese imports, igniting the first trade spat of his presidency just weeks before hosting his Chinese counterpart Hu Jintao.

The government-run U.S. International Trade Commission (USITC) had urged duties of up to 55% after union leaders claimed imports of cheap Chinese tires had tripled over the last five years. However, to minimize Chinese anger, Obama had opted for a lower figure, whereby tariffs, already at 4%, will soar by an additional 35% in the first year, 30% in the second and 25% in the third.

Beijing reacted strongly against the move, saying over the weekend that it would in turn investigate possible unfair practices in U.S. exports of car parts and chicken meat.

Xinhua news agency also quoted experts as saying that 100,000 Chinese jobs could be lost as a result of U.S. tariffs and that China's tire industry would be worse off to the tune of one billion dollars.

"The United States, by making the decision, failed to honor its commitments made at the G20 financial summit and abused trade remedy measures, which is grave protectionism and will undermine China-U.S. economic and trade ties as well as the early recovery of the world economy," said Chinese foreign ministry spokeswoman Jiang Yu over the weekend.

In today's statement, Chinese officials also reminded the U.S. of its "determination to firmly fight against trade protectionism," adding that its move to go to the WTO was a "correct action ... aimed at safeguarding our interests."

Beijing and Washington now have 60 days to hold bilateral consultations on the issue. If it is not resolved at the end of the period, the WTO would rule on the issue.

Copyright Agence France-Presse, 2009

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