China-US Tire Wars Worries Bridgestone

The upcoming introduction of the 35 percent duty for the US bound Chinese tires has sparked the first signs of distress in Europe and Asia. Japanese tire manufacturer Bridgestone recently said the dispute between the two countries over the duty will impact their business in Europe.

The main concern is that, having no where else to go, Chinese tire manufacturers will flood the European market. This worrying development comes at a time when Bridgestone was just beginning to see signs of recovery on the Old Continent.

"We will see double-digit growth in the second half of 2010," Toru Tsuda, Bridgestone Europe CEO was quoted as saying by Reuters. "Bridgestone will be profitable at a group level in 2009 and 2010." Of course, an invasion of Chinese-made tires would put a serious dent in those forecasts.

The tire duty imposed by the US on Chinese tires is set to come into effect on September 26. The extra 35 percent will complete the existing 4 percent duty. Next year, it will go down to a total of 30 percent, while in the third year is projected to decrease to 25 percent.

The move made Chinese officials cry foul play and accuse the US of taking protectionist measures. Chinese representatives say the country may take the case to the World Trade Organization and even launch anti-dumping investigations of motor vehicles and chicken products coming from the States.

"Obama has undoubtedly chosen a dangerous gambit," China's Ministry of Commerce said in a release. "The Chinese business world that has been wronged by this will not sit still on this, and even tougher contention between China and the United States may be looming."