China Sets Duties On Some U.S.-Made Cars
2012-1-1 0:00:00Author： adminFont Size：Big Medium Small
BEIJING,Dec.15 - China said Wednesday it will levy duties on imports of some U.S.-made cars in retaliation for U.S. trade policies, the latest volley in an escalating trade spat between the world's two largest economies.
Auto makers and industry observers said the move is largely symbolic and likely will have a limited impact on sales in China. But it threatened to stoke tensions between the two nations amid mounting U.S. concerns about slow job growth and overseas competition.
China's action appeared to be a response to U.S. moves in the past year to challenge China's trade policies through the World Trade Organization, the international arbiter of trade disputes. It also served as a warning shot for the U.S., which is looking into American complaints about China flooding the world with low-priced solar panels to beat back competition. The Chinese worry that U.S. will impose very high tariffs on Chinese exports of solar panels, which would cripple their sales in the U.S.
The Obama administration was "disappointed" by China's announcement and would weigh options for responding, said Andrea Mead, a spokeswoman for the U.S. Trade Representative. The administration has alleged that China's policies "violate multiple WTO rules," she said. This week, China is celebrating the 10th anniversary of its entry into the WTO.
The Obama administration, under pressure from Congress and U.S. businesses, is engaged in a long-running effort to press China to let its currency, the yuan, appreciate faster. That would help U.S. exporters who believe an undervalued yuan is hurting their competitiveness.
Long before China's announcement Wednesday, U.S. lawmakers had threatened to push back against China on a host of issues, including the currency and what they view was unfair trade practices affecting U.S. solar-panel manufacturers.
"China's actions are unjustifiable, and unfortunately, this appears to be just one more instance of impermissible Chinese retaliation against the United States and other trading partners," four top House Republicans and Democrats who oversee trade issues said in a joint statement Wednesday
China's Ministry of Commerce said in a statement that it will levy duties on imports from the U.S. of some vehicles with engine capacities above 2.5 liters made by several companies, including General Motors Co. (GM), Chrysler Group LLC and the U.S. arm of Honda Motor Co. (HMC). The ministry alleged that these companies engage in dumping and subsidizing these vehicles--selling them in overseas markets at a lower cost than at home. The ministry said the move would also affect cars made by the U.S. arms of Mercedes-Benz and BMW AG (BMW.XE), though their level of dumping was smaller. The duties begin on Thursday and will last through the next two years.
China's move served as a reminder that it has broad ambitions for its own auto industry that includes higher-end and higher-margin cars. Domestic manufacturers of sedans and sport-utility vehicles with engine sizes above 2.5 liters are "materially threatened" by imports from the U.S., the ministry said.
The move is likely to make U.S.-made cars even more expensive in China, the world's largest auto market, where existing taxes and duties can add another 25% or more to an imported vehicle's cost, depending on the model.
Still, many auto makers won't be affected because they make much of what they sell in China domestically through joint ventures, according to analysts and the companies. Furthermore, the impact on higher-end cars could be softened by a lack of price sensitivity among the growing ranks of wealthy Chinese.
GM, for instance, said on Wednesday the number of cars it imports into China is less than one-half of 1% of its domestic production in China. The company said it is working with its partners and authorities to gauge the impact of the move and to "seek a solution consistent with a constructive global trade environment, which we believe is important to both China and the US."
For Chrysler, only about 3,800 of the 22,000 vehicles the company sold in China last year were U.S.-produced and had engines bigger than 2.5 liters, said Yale Zhang, an analyst with consulting firm Automotive Foresight (Shanghai) Co. "Chrysler Group is reviewing the decision to determine the impact on our business," the auto maker said in a statement.
THE WALL STREET JOURNAL
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