Beiing, September 12: China decried a U.S. decision to impose added duty on Chinese-made tyres, calling the move protectionist abuse that sent a wrong signal before a G20 summit and could stoke reactions impeding global recovery.
The vehement denunciation from Beijing came hours after Washington announced the move, which a White House spokesman said was “to remedy the clear disruption to the U.S. tyre industry” from cheap Chinese imports.
A Chinese Ministry of Commerce spokesman, Yao Jian, said his government took this latest trade dispute with Washington especially seriously.
“China strongly condemns this grave act of trade protectionism by the U.S.,” Yao Jian said in a statement issued on the Ministry website (www.mofcom.gov.cn) on Saturday.
“This step not only violates the rules of the World Trade Organisation, it is also contrary to the relevant commitments that the United States government made at the G20 financial summit,” he said.
The new duty was the first time Washington has applied special “safeguard” provisions Beijing agreed to before joining the World Trade Organisation in 2001.
Washington and Beijing have vowed to cooperate in seeking to revival global economic growth. But the tyre dispute embodies friction over trade, which could spill into the next G20 summit later this month and U.S. President Barack Obama’s scheduled visit to China in November.
Since the financial crisis broke, these summits have repeatedly renounced trade protectionism.
Yao said the U.S. move could spark a “chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy”.
The new duty of 35 percent will take effect on Sept. 26 and adds to an existing 4 percent duty. The extra duty would fall to 30 percent in the second year and 25 percent in the third year, the White House said.
Those levels are lower than the United States’ International Trade Commission recommended earlier this year, but likely still high enough to deter tyre imports from China, if not shut them out completely.
The United Steelworkers union, which represents workers at many U.S. tire production plants, filed a petition earlier this year asking for the protection. It said a tripling of tyre imports from China to about 46 million in 2008 from about 15 million in 2004 had cost more than 5,000 U.S. tire worker jobs.
“For far too long, workers across this country have been victimized by bad trade policies and government inaction,” United Steelworkers President Leo Gerard said when welcoming the decision.
PITTSBURGH SUMMIT LOOMS
But Yao accused the Obama administration of trade protection measures without sufficient proof and of bowing before domestic protectionist forces, spurning Chinese efforts at compromise.
“This step has harmed China, as well as harming U.S. interests, and even more it sends the wrong trade protectionist signal to the world before the Pittsburgh summit.”
President Barack Obama, Chinese President Hu Jintao and other international leaders will meet for the next G20 summit of major rich and developing economies in Pittsburgh, Pennsylvania, on Sept 24-25. The new tariff kicks in the following day.
China has increasingly turned to domestic demand to shore up its growth during the global economic slump.
But for now exports remain a key part of China’s economic engine, and its relatively cheap exports to the United States have long faced complaints from U.S. manufacturing groups and unions who say Beijing is unfairly overwhelming competitors.
China warned of protectionist ripples across the global economy.
“Although the world economy has shown some positive developments, the outlook for economic revival remains tortuous, and rampant trade protectionism can only delay the course of recovery,” said Yao, the Chinese spokesman.
The U.S. trade deficit with China totalled $103 billion in the first half of 2009, down 13 percent from last year but still a source of much ire in Washington.
Yao said there was no evidence to justify the U.S. duties on his country’s tyre exports, and he said Beijing could complain to the World Trade Organisation.
In 2008, China’s tyre exports to the U.S. grew just 2.2 percent compared to the previous year’s exports, and in the first half of 2009 they fell 16 percent compared to the same period in 2008, said Yao.
“China will retain all its legitimate rights, including recourse to the World Trade Organisation,” he said.
—Agencies