Chi­nese tire in­dus­try watch­ing US trade case

Union push­ing of­fi­cials in­Wash­ing­ton to launch dump­ing in­ves­ti­ga­tion

China Daily (Canada) - - BUSINESS - By LI JIABAO and ZHU WEN­QIAN

China’s tire in­dus­try is closely mon­i­tor­ing a pe­ti­tion by theUnited Steel­work­ers union, which is call­ing for United States trade of­fi­cials to launch an anti-dump­ing and coun­ter­vail­ing duty case against cer­tain tires from China. It’s the lat­est trade spat be­tween the world’s top two economies.

Asource with the China Rub­ber In­dus­try As­so­ci­a­tion told China Daily on Thurs­day that its mem­bers are “dis­cussing so­lu­tions” to deal with the pos­si­ble US probes. The source de­clined to com­ment fur­ther.

OnTues­day, the union— which rep­re­sents 850,000 work­ers in­North Amer­ica in in­dus­tries that in­clude metals, rub­ber, chem­i­cals, paper, oil re­fin­ing, and the ser­vice and pub­lic sec­tors — filed a pe­ti­tion with the US Depart­ment of Com­merce seek­ing an an­tidump­ing and coun­ter­vail­ing duty case against pas­sen­ger and light truck tires from China.

The union al­leges mas­sive dump­ing and sub­stan­tial sub­si­diza­tion of sales of these prod­ucts by China into the US mar­ket, said LeoW. Ger­ard, pres­i­dent of the in­ter­na­tional di­vi­sion of the union.

In 2009, the union claimed a surge in Chi­nese tire im­ports from 2004 to 2008 had cost 7,000 US jobs, and it sought re­stric­tions on the im­ports. US Pres­i­dent Barack Obama backed the move, and in Septem­ber 2009, the ad­min­is­tra­tion levied a new duty of 35 per­cent on tire im­ports, which were im­posed in ad­di­tion to a pre­ex­ist­ing 4 per­cent tar­iff.

China’s ap­peal to the­World Trade Or­ga­ni­za­tion did not win sup­port from the panel, and Chi­nese ex­ports of tires to the US sub­stan­tially de­clined in the en­su­ing three years. The US re­lief ex­pired in 2012. China’s ex­ports of tires to the US mar­ket more than dou­bled to 50.8 mil­lion units last year, worth more than $2 bil­lion. In the first quar­ter of2014alone, tireim­ports­fromChina surged an­other 24.6 per­cent, the union said.

“The US Com­merce Depart­ment usu­ally fol­lows the [union’s] pe­ti­tions and thus is very likely to launch a trade probe into Chi­nese tire ex­ports again ... The re­sults may not be op­ti­mistic,” said Tu Xin­quan, deputy di­rec­tor of the China In­sti­tute for WTO Stud­ies at the Univer­sity of In­ter­na­tional Busi­ness and Eco­nom­ics.

TheUSCom­merceDepart­men­thas20­days to de­cide whether to open the in­ves­ti­ga­tions.

“The tire case shows that the US is tak­ing a tough stance on China, a move for the Demo­cratic Party to win voter sup­port be­fore the midterm elec­tion,” said YaoWeiqun, as­so­ciate pres­i­dent of the Shang­hai WTO Af­fairs Con­sul­ta­tion Cen­ter.

“The Chi­nese ex­ports are low-end tires, and they don’t en­dan­ger the US in­dus­try,” Yao said, given that the US pre­dom­i­nantly pro­duces high-end tires.

Tunoted that the world's two largest economies are see­ing fre­quent trade fric­tion.

China ex­pressed “strong dis­sat­is­fac­tion” with the US de­ci­sion on Tues­day to ap­ply pre­lim­i­nary du­ties, rang­ing from 18.56 per­cent to 35.21 per­cent, on Chi­nese so­lar equip­ment im­ports, claim­ing they had ben­e­fited un­fairly from govern­ment sub­si­dies. Con­tact the writ­ers at li­ji­abao@chi­ and zhuwen­qian@chi­

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