By on May 5, 2011

Beijing closed the book on the tit-for-tat saga that had started with the U.S. slapping punitive tariffs on Chinese tires. China’s Ministry of Commerce (MOC) issued a final ruling today, declaring that the United States has dumped subsidized sedans and sport utility vehicles with engine displacement of 2.5 liters or bigger on the Chinese market, writes China’s state-owned new agency Xinhua. According top the MOC, this has harmed China’s domestic auto manufacturing industries. Then, China did nothing.

In a surprise move, the statement continued to say that China would not take anti-dumping and countervailing measures on these vehicles until further notice.

China had launched the anti-dumping and anti-subsidy investigation into auto imports from the U.S. on November 6, 2009, two months after President Obama signed the edict to slap a 35 percent punitive tariff on Chinese car and light truck tires. The move seriously disrupted the Chinese auto industry, it raised tire prices in the U.S., it hurt American companies such as Cooper Tire that have extensive production in China, and finally ended up moving low cost tire production from China to Thailand, a country that had duty free status with the U.S.

Realizing this, the U.S. raised the Thai tire tariff to the 4 percent harmonized tariff allowed by the WTO. The same tariff the U.S.A. had charged on Chinese tires before the additional 35 percent were slapped on. Not a single job was created in the U.S. Thailand was grateful. Chinese and U.S. tire companies were miffed.


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4 Comments on “Trade War Watch 17: China Rules U.S. Dumping Subsidized Cars On Chinese Market, Does Nothing...”

  • avatar

    Go you go into detail on how this dumping scheme worked? Did US companies sell vehicles in China at a loss? Or are they saying the gov’t subsidized the losses? I have never been clear on the accusation here.

    • 0 avatar

      There are links in the article for the purpose of telling the interested reader what we know and what we don’t know.

      If that’s not enough, then there is a very informative article on the Chinese Ministry of Commerce’s website. I have linked it here for your perusal.

      • 0 avatar

        Read through the articles that basically say there was dumping but don’t say really how the dumping was done or who did the subsidizing. I guess I can just leave it at that.

    • 0 avatar

      While the Chinese could argue any point you questioned, it would be a complete waste of time when you consider the U.S. Government bought out the car companies to cover GM and Chrysler losses. It is much easier to win in court and with the public that the U.S. Government let the companies sell at a loss -an unfair competitive advantage- and then let the taxpayers cover those losses on the back end. This is a much better rebel-rousing technique.

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