China retaliates for anti-dumping move

Following an investigation of Chinese tire companies accused of selling their wares in the United States at prices below their own cost, in order to remove competitors, the Obama administration imposed new taxes on tires imported from China. In return, China has demanded investigations on United States automotive exports and poultry.

China has not allowed foreign investors to take over more than 50% of any domestic company, but its own companies, including many state-run facilities, have been allowed to purchase American and European assets. The country has been accused of allowing domestic industry to violate patents without consequence, and of subsidizing industry. Until recently, China imposed heavy tariffs on American cars and components, contributing to the U.S.’s $103 billion trade deficit.

The chicken and motor vehicle trade targeted by the Chinese government are similar in volume to the tire business targeted by the American government.

The 35% duties on Chinese tires are less than those recommended by the U.S. International Trade Commission.  They are the first application of special duties on Chinese products since China joined the World Trade Organization eight years ago.The duties will fall five percentage points for each of the next two years.