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China hits back in trade dispute with US
Published on: 2009-09-14
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BEIJING — China on Sunday hit out at US tariffs on its tyre exports and said it would investigate possible unfair practices in US exports of car parts and chicken meat, in a growing row between the two giants.

Chinese foreign ministry spokeswoman Jiang Yu said the US tariffs amounted to a "grave" form of protectionism.

"The United States, by making the decision, failed to honour its commitments made at the G20 financial summit and abused trade remedy measures, which is grave protectionism and will undermine China-US economic and trade ties as well as the early recovery of the world economy.

"We hereby express our strong discontent and firm opposition to the US decision," she said, quoted by state news agency Xinhua.

Earlier, China's commerce ministry announced a probe into the United States' own exports of car products and chicken meat to China, having warned it was likely to retaliate against the US tyre tariffs.

"In line with national laws and World Trade Organisation rules, the commerce ministry has started an anti-dumping and anti-subsidy examination of some imported US car products and chicken meat," the commerce ministry said.

"Recently, the commerce ministry has received word from domestic industries indicating that the above mentioned products had entered our nation's markets via dumping, subsidies and other unfair trade means.

"This impacted domestic industries and the commerce ministry was requested we launch an anti-dumping and anti-subsidy probe."

It gave no further details on the exact products involved or the alleged trade violations.

China was responding to an announcement by The White House on Friday of punitive duties of an extra 35 percent on Chinese-made tyres.

The dispute comes just weeks before Obama is due to host his Chinese counterpart Hu Jintao at the G20 summit this month, a meeting now sure to be a test of Washington's stated commitment to strengthening ties with Beijing.

Obama approved an increased duty on all imports of passenger vehicle and light truck tyres from China for a period of three years.

The decision was taken "in order to remedy a market disruption caused by a surge in tyre imports," the White House said.

Obama had been under pressure domestically to curb rocketing imports of Chinese goods that critics suggest have cost more than 5,000 jobs in the United States.

The government-run US International Trade Commission (USITC) had urged duties of up to 55 percent after union leaders claimed imports of cheap Chinese tyres had tripled over the last five years.

However, to minimise Chinese anger, Obama opted for a lower figure, whereby tariffs, already at four percent, will soar by an additional 35 percent in the first year, 30 percent in the second and 25 percent in the third.

China was already angered earlier in the week when Washington imposed tariffs on pipes used in the petroleum industry.

On Sunday, Xinhua news agency quoted experts as saying that 100,000 Chinese jobs could be lost as a result of the US tariffs and that China's tyre industry would be worse off to the tune of one billion dollars.

The United States has long grappled with a ballooning trade deficit with China amid allegations that Beijing has been manipulating its currency to make its exports more competitive.

Obama entered the White House in January after campaigning for a robust trade policy with China.

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