US Doesn't Fear China Trade War

The US government seems confident the recently introduced duty for tires imported from China will not lead to a broader trade war between the two countries. The statement was made by US Deputy Secretary of State James Steinberg, who added neither country wants such an outcome.

According to Reuters, Steinberg also tried to explain why the US took the action it did and slapped the new 35 percent duty on Chinese tires. According to the American official, the decision has been made according to the terms of a World Trade Organization framework accepted by both countries.

Steinberg will visit China this week, as part of an Asian tour. He will try to tackle the tire issue as well, after President Obama already did so at the UN General Assembly in New York, when he tried to reach common ground with President Hu Jintao.

The new 35 percent tire duty imposed by the US came into effect on September 26, in addition to the existing 4 percent duty. In 2010, the duty will be reduced to a total of 30 percent, while in the third year is projected to decrease to 25 percent.

The US decision has made China threat to 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 earlier this month. "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."