US auto imports face anti-dumping duties

Updated: 2011-12-15 07:27

By Li Fangfang and Ding Qingfen (China Daily)

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BEIJING - Anti-dumping and anti-subsidy duties will be placed on vehicle imports from the United States for two years, the Ministry of Commerce said on Wednesday.

The move is in accordance with domestic legislation and the World Trade Organization (WTO) rules, and shows China is finally learning how to protect its interests under international trade rules, analysts said.

The ministry said in a statement on its website that it will start to impose taxes on cars and sports-utility vehicles made in the US with an engine capacity of more than 2.5 liters, from Dec 15, 2011 to Dec 14, 2013.

"US vehicles benefiting from subsidies and dumping on the China market have substantially damaged China's auto industry," the statement said.

General Motors and Chrysler will be affected most by the duties.

Anti-dumping duties on GM vehicles will stand at 8.9 percent and at 8.8 percent for Chrysler vehicles.

GM vehicles will also face anti-subsidy duties of 12.9 percent while Chrysler vehicles will face 6.2 percent anti-subsidy duties.

US units of German automaker BMW and Mercedes-Benz will also be hit by duties of 2.0 percent and 2.7 percent, respectively, according to the statement.

Currently, China imposes tariffs of 25 percent on imported passenger vehicles.

Zhou Shijian, a senior expert on China-US trade from Tsinghua University, said that the move is a "proper and equal" counterattack to US trade investigations aimed at China.

"It's reasonable self-defense for China," Zhou said as he cited the US targeting imports of Chinese tires with massive duties in 2009.

"An eye for an eye is a sound way for China to face trade disputes with the US under WTO regulations."

The Obama administration imposed a 35-percent anti-dumping tariff on imported tires from China valued at about $1.8 billion, over three years. It will result in cutting China's tire exports to the US by more than 50 percent, and lead to possibly 100,000 job losses in China's domestic tire industry.

Li Zhongzhou, a former official from the Ministry of Commerce and a WTO expert from the EU-China Trade Project, also said that "China should strike back in its own good time as the US always stirs up investigations targeting China by routinely using trade remedy measures".

And "it's good to see that China has learnt to better use trade regulations to protect itself and respond to trade challenges", Zhou said.

However, Zhong Shi, an independent auto analyst based in Beijing, said that the duties will have a limited impact on US vehicle exports to China. GM Cadillac models do not have a large market share while Chrysler doesn't do much business in China, Zhong said.

GM's import volume is less than half of one percent of its domestic production in China, a company statement said on Wednesday.

"It's more of a signal that China is exerting pressure on US trade protectionist moves," Zhong said.

China imported 905,000 vehicles up to the end of November, year-on-year growth of 31 percent. Imports for the year are expected to pass the million mark. European automakers dominate the segment with about 60 percent market share.