China Strongly Opposes U.S. Protectionist Tariffs on Tires from China

China strongly opposes a U.S. decision made Friday night to impose special protectionist tariffs on tire imports from China, Ministry of Commerce (MOC) spokesman Yao Jian said Saturday.

Yao said China has held negotiations with the U.S. over the case but the U.S. still sticks to this decision, which is serious trade protectionism, with which China is strongly dissatisfied.

The Ministry said the U.S. had violated the WTO rule by this decision, and also its relevant commitments made on the G-20 financial summit.

Yao said China would reserve all rights to take responsive actions to firmly protect the interests of Chinese companies.

According to a Los Angeles Times report Saturday, within 15 days, the U.S. would add a duty of 35 percent in the first year, 30 percent in the second and 25 percent in the third on passenger vehicle and light-truck tires from China.

The report said the decision came after the U.S. International Trade Commission determined that a surge of Chinese-made tires had disrupted the domestic market and cost thousands of jobs in the U.S.

The Ministry said on its website Saturday the U.S. lacked bases for the case because tire products exported to the U.S. from China had actually declined 16 percent in the first of this year, compared to the same period last year. China's tire exports to U.S. in 2008 only rose 2.2 percent from 2007.

It said the business situation of the U.S. tire producers has shown no apparent changes after the entry of Chinese products. There exists no direct competition between China's tire products and the U.S.-made ones as China's tires mainly go for the U.S. maintenance market.

Leaders from around the globe have reached consensus to oppose trade protectionism since the outbreak of the financial crisis. But the tire case, lacking factual bases, is an abuse of protectionist measures. It not only hurts the interests of China, but also those of the U.S., the Ministry said.

It would also send a wrong signal to the world ahead of the upcoming Group of 20 nations in Pittsburgh Sept. 24-25, and could trigger a chain reaction of trade protectionist measures that will slow world economic recovery, according to the website statement.

Although U.S. President Barack Obama's ruling on the tire case was said to be based on law by the U.S. government, it is seen as a resolution under political pressure at home.

According to a report by the Associated Press (AP) Saturday, China will be a major presence at the G-20 Pittsburgh meeting, and the U.S. will take the stance of supporting free trade.

It reported many of the nearly two dozen world leaders Obama is hosting are critical of countries that protect their key industries. The report said Obama has also spoken out strongly against protectionism and other countries will view his decision on tires as a test of that stance.

AP reported the White House badly needs China to help confront climate change, nuclear standoffs with Iran and the Democratic People's Republic of Korea, and global economic turmoil.

According to the MOC, China is the second-largest trading partner with the U.S. and vice versa. China believes the Sino-U.S. economic trade cooperation is significant. The country would not like to see damages to bilateral trade relations caused by protectionism.

The Ministry said the ruling would have an negative impact on four tire-making U.S. companies doing businesses in China as they account for two thirds of China's tire exports to the U.S.

The increased tariffs would also raise tire prices for U.S. consumers, which would further weaken the government efforts to revitalize the auto industry. Some consumers may even consider postponing replacing old tires, creating concern for safety, according to the MOC.

The MOC said the Chinese government will continue to take necessary measures to support the tire industry and deal with the negative impact caused by the case. China also reserves the right to bring the case to the World Trade Organization.