China Files Complaint against U.S. Tire Tariff

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Date: 
Mon, 2009-09-14 03:00

by: Alan M. Field (afield@joc.com)

China filed a World Trade Organization complaint Monday against a 35 percent U.S. tariff on tire imports.

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

United States Trade Representative Ron Kirk on Sept. 11 said the United States will impose temporary trade remedies to stop what he called a harmful surge of imports of Chinese tires for passenger cars and light trucks "to level the playing field for American workers in the tire market."

Kirk said he made the decision to impose temporary tariffs of up to 35 percent based on the U.S. International Trade Commission's conclusion that a surge in Chinese-made tires had cost thousands of U.S. jobs.

The dispute could complicate discussions between the United States and China at the Group of 20 Summit in Pittsburgh, September 24-25, where leading economies will discuss efforts to address the global recession.

The U.S. plan is to impose a tariff of 35 percent ad valorem in the first year, 30 percent in the second, and 25 percent in the third year. President Obama also announced Friday that Trade Adjustment Assistance will immediately be targeted to help workers, industries, and communities affected by surging imports of Chinese tires. The United Steelworkers brought the case in April and said more than 5,000 tire workers have lost jobs since 2004 as Chinese tires flooded the U.S. market.

China's Ministry of Commerce said it "strongly opposes" what it called "a serious act of trade protectionism." China "reserves the right to make further response," the Ministry said. In addition, Fan Rende, chairman of China Rubber Industry Association, told the Chinese press, "Obama's decision may affect the employment of 100,000 tire workers in China and may bring an aggregated loss of $1 billion to China's tire exporters." Fan said the high U.S. duties may prevent Chinese companies from exporting tires to the United States. China has 20 tire companies, including four U.S.-based companies that operate there.

The Chinese ministry of commerce also said Sunday that it was investigating U.S. automotive and poultry product imports following complaints from local industries that some of these products are being dumped in the Chinese market or are benefiting from subsidies, "seriously affecting" domestic industries.

In defense of the U.S. decision, Scott Paul, executive director of the Alliance for American Manufacturing (AAM), said, "Providing relief for beleaguered tire workers was the right thing to do. President Obama deserves praise for being true to his word and for deciding a trade case based on facts rather than fears or philosophy. It bodes well for U.S. manufacturing that the Administration recognizes the need to enforce our trade laws."

Source: The Journal of Commerce

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