China May Add Auto Duty for US Carmakers

Following the introduction of an increased tire duty on tire imports from China, the Asian country strikes back as it announced it will begin an anti-dumping investigation which may eventually lead to increased duties for autos and sports utility vehicles manufactured by the 3 Detroit carmakers. The announcement was made in light of President Barack Obama's visit in China this November and the exact provisions of the Chinese allegations are not entirely known.

"The documents containing the charges were presented by China to the U.S. government this week, but have not yet been translated. Therefore we are not in a position to comment on the matter at this time," Steve Collins, American Automotive Policy Council president was quoted as saying by Reuters.

Threats of an anti-dumping investigation were made by the Chinese since September, when the tire duty was announced. The Chinese said they will look into both motor vehicles and chicken products coming from the States.

"Obama has undoubtedly chosen a dangerous gambit," China's Ministry of Commerce said at the time. "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."

The thing that started it all, the 35 percent tire duty which came into effect on September 26, has been seen by the Chinese as a protectionist measure adopted by the US.

Things now look somewhat grim for Chrysler, GM and Ford, as all of them began relying more and more on the positive numbers coming from China. Yet, with only some 9,000 vehicles exported to China every year and localized production for the carmakers, it is unlikely a possible new duty may hurt the industry too much.