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China Warns US on Tire Duty

The new tire duty approved by the Obama administration on tires which come from China has all the odds of turning from a small-lake ripple into an all out tsunami. After the somewhat cautious statements made over the weekend, the Chinese are building up the pressure today, in an attempt to make the US reconsider.

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, Reuters reported.

"Obama has undoubtedly chosen a dangerous gambit," China's Ministry of Commerce said in a release quoted by the source. "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 new duty of 35 percent approved by the US will come into effect on September 26 and 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.

China's first reaction was to accuse the US of engaging in protectionist actions, which may have unforeseeable results, "chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy."

The whole scandal began with a motion submitted earlier this year by the United Steelworkers union, which represents workers at several tire plants across the country. Their main argument was that the increase in imports from China has cost the Americans some 5,000 jobs since 2004.

Some in the US as well, especially tire manufacturers themselves, stand against the government's decision. "We are certainly disheartened that the president bowed to the union and disregarded the interests of thousands of other American workers and consumers," Marguerite Trossevin, counsel to the American Coalition for Free Trade said over the weekend.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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