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 tyres — 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. The report said the decision came after the US International Trade Commission determined that a surge of Chinese-made tyres had disrupted the domestic market and cost thousands of jobs in the US. The ministry said on its website 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, 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 tyres mainly go for the US maintenance market.
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