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September 15, 2009

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China to fight US tire tariffs at WTO

CHINA filed a World Trade Organization complaint yesterday over new US tariffs on Chinese tires, the Ministry of Commerce said.

The conflict is a potential irritant as the countries prepare for a summit of the Group of 20 leading economies in Pittsburgh, Pennsylvania, on September 24-25 to discuss efforts to end the worst global downturn since the 1930s.

The US government's decision to impose special tariffs on tire imports from China violated WTO rules and was an abuse of trade remedy measures, Ministry of Commerce spokesman Yao Jian said.

"China's requirement for talks with the US is proper practice to exercise its rights as a WTO member and is a practical move to defend its own interests," Yao said.

When the US decision takes effect on September 26, car and light-truck tires imported from China will suffer punitive tariffs that go from 35 percent to 30 percent to 25 percent over the next three years.


US President Barack Obama approved the new duties last Friday to slow the jump in US imports of Chinese-made tires. China said the move was a violation of free trade and called on other governments to oppose protectionism.

"Although the duties the US has decided to impose are lower than those recommended by the US International Trade Commission, it is still a serious case of trade protectionism, which China resolutely opposes," said Vice Minister of Commerce Zhong Shan.

The ITC recommended that Obama impose a 55 percent tariff on Chinese tire imports in the first year, 45 percent in the second and 35 percent in the third before being removed.

The Chinese government will take steps to help domestic tire makers overcome any difficulties they face, Zhong said. The government will also assist tire producers in developing high-end products through technological innovation, he said.

The Chinese complaint to the WTO in Geneva triggers a 60-day process in which the two sides must try to resolve their dispute through negotiations. If that fails, China can request a WTO panel to investigate and rule on the case.

China expressed hope that "all sides will understand its determination to firmly fight trade protectionism to commonly safeguard the multilateral trading system by respecting WTO rules."

Shares of China's tire makers plunged yesterday. Double Coin Holdings Ltd fell by the daily 10 percent limit to 19.01 yuan (US$2.78). Guizhou Tire Co lost 6.68 percent to finish at 14.95 yuan, and Aeolus Tire Co sank 3.31 percent to 12.84 yuan.

The United States and China have been embroiled in disputes over access to each other's markets for goods including steel pipe, auto parts, poultry, movies and music.

On Sunday, China announced it would probe complaints that American auto and chicken products are being dumped in China or benefiting from subsidies. The ministry said the US imports have dealt a blow to domestic industries.


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