China Appeals WTO Ruling in Tire Dispute with U.S.

May 24, 2011
Global trade body upheld tariffs levied on certain imports.

China notified the World Trade Organization on May 24 that it would appeal the global trade bodys December 2010 ruling that upheld the United States increased tariffs on certain tire imports from the Asian nation.

The trade dispute dates back to 2009, when President Obama imposed three years of duties on certain Chinese passenger and light truck tires in response to findings by the U.S. International Trade Commission that rapidly increasing tire imports from China were causing material injury to the domestic market. The ITC made its finding following an investigation prompted by a United Steelworkers petition for import relief. The commission also recommended three years of duties on Chinese tires -- 35% in the first year, 45% in the second and 55% in the third.

In September 2009 Obama acted on the recommendations, but lessened the sting. He imposed duties of 35% in the first year, 30% in the second year and 25% in the third year.

Even within the United States, the ITCs ruling put groups in opposite corners. While labor groups applauded the decision, groups representing tire dealers, distributors and manufacturers said it would not bring jobs back to the United States.

In response to the U.S. measures, China took the case to the WTO, arguing that the United States actions violated global trade rules. In late 2010, a WTO dispute settlement panel rejected Chinas claims, concluding that the United States did not fail to comply with its world trade rules obligations in imposing the duties.

Appeals to the panels ruling are heard by three members of a WTO appellate body, and must be based on points of law. They cannot re-examine factual findings made by the panel, according to the WTO.

Typically, the appellate body has up to three months to conclude its report.

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