The U.S. Automakers Accused of Dumping Vehicles into China

China has accused automakers in the United States of dumping sedans and sports utility vehicles with engines larger than 2.5 liters into the country.

The Ministry of Commerce said in a statement on its website on April 02, 2011 that such dumping measures and subsidies have caused "substantial harm" to the Chinese industry.

However, the ministry said it will not levy temporary anti-dumping taxes or adopt countervailing measures.

The statement also said the ministry has given the relevant parties 10 days to submit written comments and evidence, and promises further deliberation based on any new material.

The ministry began the anti-dumping investigation in November 2009.

Wang Xin, director of the ministry's department for supervision and inspections, refused to comment on the decision to China Daily, but said the announcement came when the scheduled one and a half year period for investigation is almost due.

Five manufacturers, including General Motors, Chrysler and BMW, were listed in the ministry's statement. Dumping margins range from 2 percent to 21.5 percent, and subsidy rates were up to 12.9 percent.

GM China, which had the highest dumping margins and subsidy rates, said it was unaware of the statement, and declined to comment further.

Experts said the ministry's move is in accordance with World Trade Organization (WTO) rules, and the conclusion will cause limited harm to the US automotive industry.

Zhou Shijian, a senior researcher on China-US relations at Tsinghua University, said China's move is a retaliation against import tariffs imposed by the US on Chinese tire makers.

In September 2009, US President Barack Obama announced a three-year tariff on Chinese-made tires in response to an appeal from United Steelworkers, which complained that tires imported from China to the US tripled in numbers between 2001 and 2004, accusing China of dumping truck tires.

Chinese government said the case, which violated WTO rules, was trade protectionism. The case is estimated to cause at least a $1 billion loss to China's tire manufacturers.

Analysts said the impact of the ministry's ruling on the US auto industry would be limited.

Xu Changming, senior economist for the State Information Center, said sales of US-made vehicles in China are not very strong, but some sport utility vehicles made by BMW's US factories have big market shares in China,

He Weiwen, a standing council member of the China Society for WTO Studies, suggested that China should investigate the industries that the US may dump more products, and be prepared to provide subsidies.

The WTO ruled in March that the US had illegally imposed a number of anti-dumping and countervailing tariffs on some made-in-China products, including steel pipes and woven sacks.