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September 14, 2009

US/China: US-China tyre trade row deepens

The Obama administration has said it will impose duties of 35% in the first year on Chinese passenger and light truck tyres, provoking an angry response from the Chinese government.

The Obama administration has said it will impose duties of 35% in the first year on Chinese passenger and light truck tyres, provoking an angry response from the Chinese government.

The US said it was responding to what the US International Trade Commission determined to be a surge of Chinese tyre exports that has rocked the domestic US tyre industry and displaced thousands of jobs.

China’s government said in a statement that it strongly opposes what it called a ‘serious act of trade protectionism’.

In what looks like a tit-for-tat move, the Chinese government has said it is investigating US automotive and poultry product imports following complaints from local industries that some of these products are being dumped in the Chinese market.

The Chinese government also said the ruling would have an negative impact on four tyre-making US companies doing businesses in China as they account for two thirds of China’s tyre exports to the US.

It also warned that the US move threatens to spark a round of trade protectionism, something that has been largely averted thus far in the international response to the financial crisis and economic downturn.

Observers say that the US move appears to have resulted from domestic political pressures and threatens to put a cloud over the upcoming G20 meeting at which Obama is expected to speak in favour of free trade.

As the world’s second biggest exporter, China is frequently involved in trade disputes, and has been challenged by the United States on a range of issues, from import tariffs on car parts to protection of intellectual property.

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