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China to probe auto, chicken products from US

  • Source: Global Times
  • [08:12 September 14 2009]
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Tires exported to the US market comprise about 10 percent of what Giti sold to the Chinese and the world markets.

"We will not give up the US market, but we have to wait and see whether there might be any change in the US policy," he said.

Despite the bill, he said, some manufacturers with high profit margins could still export their products to the US market, but their profits will undoubtedly slump.

'Conflicts lead to maturity'

He Maochun, an economist at Tsinghua University, prefers to call China's move a new trade conflict, declining to refer to it as a trade war.

"It's natural that Sino-US trade will experience some friction and retaliation before it gets balanced," He said. "And the revenge measures will be limited to only a few areas."

The new duty of 35 percent against tires from China will take effect September 26 and adds to an existing 4 percent duty. The extra duty will fall to 30 percent in the second year and 25 percent in the third year.

Washington's signing of the new tariffs comes after the US International Trade Commission (ITC) determined that a surge of Chinese-made tires had disrupted the US market and cost thousands of jobs.

The United Steelworkers union, which represents workers at major US tire manufacturers, filed a petition against China in April for import relief, asking for a 55-percent tariff on the Chinese tires.

"China's revenge may affect tens of thousands of jobs in the US," He said. "Their income may decrease, but the job opportunities may not shrink sharply."

"The sanctions and frictions in the bilateral trade area are not harmful to the relationship between the two countries," He said. "Instead, it makes the relationship more mature."

"The US is acting in accordance with the rules of the WTO when they put tariffs on Chinese imports," He said. "And China can do the same thing to the US."

Some analysts said new tire duties would do little to help US workers because manufacturers will shift outsourcing from China to other countries with cheap labor costs.

"I think Obama has put himself into what will prove to be a very uncomfortable position," Nicholas Lardy, a China specialist at the Peterson Institute for International Economics, a Washington think tank, told the Los Angles Times.

None of the US tire makers' operations in China, according to the ITC, publicly supported the Steelworkers complaint, Bloomberg reported. Goodyear Tire, the largest US tiremaker, stayed neutral, while Cooper Tire & Rubber, the second-largest US tiremaker, opposed the relief, according to Bloomberg.

Guo Qiang and An Baijie contributed to this story

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