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Close on the heels of President Barack Obama's tariff imposition on tires from China, the Asian country's Ministry of Commerce launched anti-dumping and anti-subsidies probes into certain automobile and chicken products made in the U.S.
The investigation follows complaints from Chinese manufacturers, who alleged that these products entered Chinese markets with an "unfair competition manner", which harmed domestic industries. According to the ministry, the investigation is in accordance with the World Trade Organization rules and China's laws. It added that China always firmly opposes protectionism.
While the Chinese Commerce Ministry did not specify the value of imports of the products that have come under the scanner, it was reported that the dumping investigation relates to only poultry. The ministry did not label the decision as retaliation against the tire dispute, but said it acted in response to domestic concerns.
When the U.S. decision takes effect on September 26, car and light truck tires imported from China will bear punitive tariffs of 35%, 30% and 25% in the next three years, respectively. The existing duty is 4%. The decision, following a complaint from the United Steelworkers union, is expected to affect about 100,000 Chinese workers and the Chinese tire industry is likely to suffer a loss of $1 billion in export.
China said Sunday that the U.S. move was a severe trade protectionism action and is against its commitments at the Group of 20 summit. China may refer the U.S. Decision to the World Trade Organization. China's Minister of Commerce Chen Deming said Saturday that the U.S. Decision, which has met with public criticism in China, was grave trade protectionism and sent a wrong signal to the world.
There are also fears in China that the U.S. could also levy heavier tariffs on other imports from the country, like steel, aluminum and chemical products. The US Commerce Department said last week it had made a preliminary decision to impose duties ranging from 11%-31% on imports of Chinese steel pipes used for oil and gas wells. Last year, China's tire exports to the U.S. Reportedly grew by just 2.2% from the previous year and, in the first half of this year, fell 16%, compared to 2008.
Earlier in the month, certain farm-goods exporters in the U.S. reportedly urged Obama to refrain from imposing tariffs or quotas on tires from China as they feared retaliation against U.S. food and agriculture products.
The protectionist measures adopted by certain major economies have made recovery from recession more challenging. The European Central bank said in its monthly bulletin this month that ''concerns remain relating to a stronger or more protracted negative feedback loop between the real economy and the still strained financial markets, renewed increases in oil and other commodity prices, the intensification of protectionist pressures and a disorderly correction of global imbalances.''
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