BEIJING/WASHINGTON (Reuters) – China decried a US decision to impose added duty on Chinese-made tyres, saying the move sent a dangerous protectionist signal before a G20 summit and could stoke reactions impeding global recovery.
But the White House played down the dispute, saying it was simply “enforcing the rules of the road” and did not expect the matter to escalate into a trade war.
“We’re simply enforcing those rules and we expect the Chinese to understand those rules,” White House spokesman Robert Gibbs told reporters yesterday.
US President Barack Obama slapped the additional duties on tyre imports from China on Friday, in what Gibbs said on Friday was meant “to remedy the clear disruption to the US tyre industry” from cheap Chinese imports.
China’s minister of commerce, Chen Deming, indicated he took this latest trade dispute with Washington especially seriously.
“This is a grave act of trade protectionism,” Chen said in a statement put on his ministry’s website yesterday.
“Not only does it violate WTO rules, it contravenes commitments the United States government made at the G20 financial summit, and is an abuse of special safeguard provisions that sends the wrong signal to the world.”
The tyre duty was the first time Washington has applied special “safeguard” provisions Beijing agreed to before joining the World Trade Organisation in 2001.
Washington and Beijing have vowed to cooperate in seeking to revive global economic growth. But this dispute brings into focus their continued friction over trade, which could spill into the G20 summit later this month and Obama’s scheduled visit to China in November.
Since the financial crisis broke, the G20 gatherings of major rich and developing nations have renounced trade protectionism.
The Chinese Ministry of Commerce spokesman, Yao Jian, said the US move could spark a “chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy”, according to the ministry website.
The new duty of 35 per cent will take effect on Sept. 26 and adds to an existing 4 percent duty. The extra duty would fall to 30 per cent in the second year and 25 per cent in the third year.
Those levels are lower than the United States’ International Trade Commission recommended, but probably 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-making plants, filed a petition earlier this year seeking the protection. It said a 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 tyre worker jobs.
“For far too long, workers across this country have been victimised by bad trade policies and government inaction,” United Steelworkers President Leo Gerard said, welcoming the decision.
