China slams US tyre tariffs

September 12, 2009

, BEIJING, Sept 12 – Beijing lashed out at the US on Saturday after Washington slapped steep tariffs on imported Chinese tyres, calling the measure "protectionist" and threatening retaliation in China\’s first trade spat with the Obama administration.

"China is firmly opposed to this measure of serious commercial protectionism by the United States, which not only violates world trade rules but also the undertakings given by the US at the G20," commerce ministry spokesman Yao Jian said in statements posted on the ministry\’s website.

"In the context of the global economic crisis this sets a very bad example. China reserves the right to retaliate," he said.

The comments come after the White House announced punitive duties of an additional 35 percent on Chinese-made tyres just weeks before Barack Obama is due to host his Chinese counterpart Hu Jintao at the G20 summit in November.

"President (Obama) today signed a determination to apply an increased duty to all imports of passenger vehicle and light truck tyres from China for a period of three years," the White House said in a statement on Friday.

The decision was taken "in order to remedy a market disruption caused by a surge in tyre imports," the statement said.

Obama had been under pressure domestically to curb rocketing imports of Chinese goods that critics suggest have cost more than 5,000 jobs in the US.

The government-run US International Trade Commission (USITC) had urged duties of up to 55 percent after union leaders claimed cheap Chinese tyres had tripled over the last five years.

However, in a move aimed at minimising Chinese anger, Obama opted for a lower figure, whereby tariffs — already at four percent — will soar by an additional 35 percent in the first year, 30 percent in the second and 25 percent in the third.

Chinese ire was piqued earlier in the week when the US imposed tariffs on pipes used in the petroleum industry.

During a meeting Thursday with Wu Banguo, president of the Chinese parliament, Obama stressed the importance of relations between the two nations, according to a statement released by the White House.

And last month Beijing appealed to Washington to reject punitive tariff proposals to protect the developing relationship between the two capitals.

The United States has long grappled with a ballooning trade deficit with China amid allegations that Beijing has been manipulating its currency to make its exports more competitive.

Obama entered the White House in January after campaigning for a robust trade policy with China.

His administration has prodded Beijing, now the third-largest buyer of US exports, to act swiftly on market reforms, saying American producers needed enhanced market access now to save and create jobs at home.

The US ambassador to Beijing announced last month that Obama would make his first presidential visit to China in the middle of November.

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