US imposes 35% duty on Chinese tyres; China warns of retaliation

US imposes 35% duty on Chinese tyres; China warns of retaliation

A Chinese worker moves large tires at an assembly line for buses made by Chinese auto manufacturer Foton Motor Group in Beijing

The additional import duty would be in force for three years, however, it would decline by five per cent each in subsequent years.
"The additional duty to passenger vehicle and light truck tires – complementing the existing four per cent duty– will be set at 35 per cent ad valorem for the first year, 30 per cent ad valorem the second year, and 25 per cent ad valorem the third year," the White House said in a statement.

"In the context of the global economic crisis this sets a very bad example. China reserves the right to retaliate," a top Chinese official said in Beijing.
Obama signed a presidential determination in this regard after reviewing recommendations from the United States Trade Representative (USTR).
"China is firmly opposed to this measure of serious commercial protectionism by the United States, which not only violates world trade rules but also the undertakings given by the US at the G20," commerce ministry spokesman Yao Jian said in statements posted on the ministry of commerce website.
"The US had violated WTO rule by this decision and also relevant commitments made on the G-20 financial summit," the ministry was quoted as saying by Xinhua.

According to reports within 15 days, the US would add a duty of 35 per cent in the first year, 30 per cent in the second and 25 per cent in the third on passenger vehicle and light-truck tires from China.
The report said the decision came after the US International Trade Commission determined that a surge of Chinese-made tires had disrupted the domestic market and cost thousands of jobs in the US.
The Ministry said on its website today the US lacked bases for the case because tyre products exported to the US from China had actually declined 16 per cent in the first of this year, compared to the same period last year. China's tire exports to US in 2008 only rose 2.2 per cent from 2007, the official Xinhua news agency reported.
It said the business situation of the US tire producers has shown no apparent changes after the entry of Chinese products. There exists no direct competition between China's tire products and the US-made ones as China's tires mainly go for the US maintenance market.
Leaders from around the globe have reached consensus to oppose trade protectionism since the outbreak of the financial crisis. But the tire case, lacking factual bases, is an abuse of protectionist measures. It not only hurts the interests of China, but also those of the US, the Ministry said.
It would also send a wrong signal to the world ahead of the upcoming Group of 20 nations in Pittsburgh September 24-25, and could trigger a chain reaction of trade protectionist measures that will slow world economic recovery, according to the website statement.

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