China lashed a US decision to impose duties on Chinese-made tires, calling it flagrant protectionism that sends the wrong signal before the next G20 summit and risks a “chain reaction” that could slow global recovery.
“China strongly condemns this grave act of trade protectionism by the US,” Chinese Ministry of Commerce Spokesman Yao Jian (姚堅) said in a statement issued on the ministry Web site yesterday, hours after the administration of US President Barack Obama announced the move.
The new duty of 35 percent will take effect on Sept. 26 and adds to an existing 4 percent duty. The extra duty will fall to 30 percent in the second year and 25 percent in the third year.
Those levels are lower than the US International Trade Commission recommended earlier this year, but likely high enough to restrict tire imports significantly from China, if not shut them out completely.
“The president decided to remedy the clear disruption to the US tire industry based on the facts and the law in this case,” White House Spokesman Robert Gibbs said in a statement.
The United Steelworkers union, which represents workers at many US tire production plants, filed a petition earlier this year asking for the protection.
It said a tripling of tire imports from China to about 46 million last year from about 15 million in 2004 had cost more than 5,000 US tire worker jobs.
Beijing’s reaction was unusually detailed and vehement.
“This step not only violates the rules of the WTO, it is also contrary to the relevant commitments that the United States government made at the G20 financial summit,” Yao said.
He accused the Obama administration of trade protection measures without sufficient proof and of bowing before domestic protectionist forces.
“This step has harmed China, as well as harming US interests, and even more, it sends the wrong trade protectionist signal to the world before the Pittsburgh summit,” he said.
Obama, Chinese President Hu Jintao (胡錦濤) and other leaders will meet for the next G20 summit of major rich and developing economies in Pittsburgh, Pennsylvania, later this month.
Yao said the duties could spark a “chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy.”
China has increasingly turned to domestic demand to shore up its growth during the global economic slump.
But for now, exports remain a key part of China’s economic engine, and its relatively cheap exports to the US have long faced complaints from US manufacturing groups and trade unions who say Beijing is unfairly overwhelming other competitors.
Yao said there was no evidence of that in the tire case, and he said Beijing could take its complaint to the WTO.
No US tire manufacturer supported the case and one, Cooper Tire, publicly opposed it.
David Spooner, outside counsel for the Chinese tire industry, said: “These tariffs are unwarranted. It’s troubling that the administration would invoke an import surge safeguard over the objections of US industry and in response to falling imports. Not a single US tire company supports these taxes.”
US tire wholesalers and retailers also warned a double-digit duty would cause them to cut jobs.
They argued that major US tire manufacturers no longer wanted to produce the low-priced tires imported from China.
“We are certainly disheartened that the president bowed to the union and disregarded the interests of thousands of other American workers and consumers,” said Marguerite Trossevin, counsel to the American Coalition for Free Trade in Tires.
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