China angered by US tyre tariff

Beijing calls import duty "protectionist" and says it violates trade rules.

    Washington says US tyre manufacturing has been 'disrupted' by Chinese imports [GALLO/GETTY] 

    The imposition of the new duty was the first time that Washington has applied so-called special "safeguard" provisions agreed by Beijing before it joined the WTO in 2001.

    Protectionist measure

    Amid the world economic slump, governments have generally warned against resorting to protectionist measures, with Beijing and Washington agreeing to co-operate to spur a global revival.

    "For far too long, workers across this country have been victimised by bad trade policies and government inaction"

    Leo Gerard,
    president of United Steelworkers union

    "Although the world economy has shown some positive developments, the outlook for economic revival remains tortuous, and rampant trade protectionism can only delay the course of recovery," Yao said.

    "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."

    The row threatens to spill over to the the next G20 summit of major rich and developing economies in Pittsburgh, Pennsylvania.

    The new tariff of 35 per cent, which adds to an existing 4 per cent duty, comes into effect the following day on September 24-25.

    The duty is set to fall to 30 per cent in the second year and 25 per cent in the third year, the White House said.

    Tariff welcomed

    The tariff is lower than that recommended by the America's International Trade Commission earlier this year, but likely still high enough to deter tyre imports from China, if not shut them out completely.

    The United Steelworkers union, which represents workers at many US tyre production plants and which filed a petition earlier this year asking for the protection, welcomed the move.

    "For far too long, workers across this country have been victimised by bad trade policies and government inaction," Leo Gerard, the United Steelworkers president, said.

    The union has said that the tripling of tyre imports from China to about 46 million in 2008 - from about 15 million in 2004 - had cost more than 5,000 US jobs.

    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.

    In 2008, China's tyre exports to the US grew just 2.2 per cent compared to the previous year's exports, and in the first half of 2009 they fell 16 per cent compared to the same period in 2008, Yao said.

    The US trade deficit with China totalled $103bn in the first half of 2009, down 13 per cent from last year but is still a source of concern in Washington.

    SOURCE: Agencies


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