China and US in fresh trade clash

13 September 2009

14 September 2009

Trade relations between the US and China have become strained after a anti-dumping dispute erupted this weekend.

China's Ministry of Commerce was yesterday set to launch an "anti-dumping and anti-subsidies" investigation into imports of US car products and chicken meat, according to state media website Xinhua.

The Chinese government was alerted to the issue following complaints from manufacturers that the goods had entered the country's market in an "unfair competition manner". The Ministry of Commerce said the probe was in line with World Trade Organization rules.

If a company exports a product at a cost lower than the price it normally charges in its local market, it is said to be "dumping" the product, according to the WTO.

The investigation comes a day after the US government imposed tariffs on the "harmful surge" of Chinese tyre imports for passenger cars and light trucks.

The US will introduce tariffs of 35 per cent on Chinese-made tyres in the first year of the measures, and 30 per cent and then 25 per cent in the subsequent two years.

China's minister of commerce Chen Deming said the tariffs were "protectionist" and "sent the wrong signal to the world".

US trade ambassador Ron Kirk said it was a "necessary response to the harm done to US workers and businesses". He added: "China is America's second-largest trading partner, and the health and strength of our relationship are very important to both countries. We consulted with China as allowed for under the WTO."

Earlier this year the US complained to the WTO about limits China has placed on raw material exports (news, 25 June 2009).

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