China Slaps Duties on US Cars As Trade Tiff Escalates

Cars made in the US will have anti-subsidy and anti-dumping duties imposed on them effective December 15, said China’s Commerce Ministry Wednesday. The move was just the latest in a series of tit-for-tat tariffs imposed by China and the US.

The duties will affect cars with engine capacities above 2.5 liters made by General Motors, Chrysler, Ford and U.S.-based foreign automakers like BMW. The duties will range between 2.0% and 21.5% and will last two years.

Anti-dumping duties are set at 8.9% on GM cars, 2.0% for BMWs assembled in the US, 8.8% for Chrysler vehicles and 21.% for other US automakers that were not identified.

Additonal anti-subsidy duties of 12.9% will be tacked onto GM cars and 6.2% on Chrysler cars.

US-made cars and SUVs benefited from subsidies and had been dumped into the China market, causing “substantial damage to China’s domestic industry,” said a statement on the Ministry’s website.

Trade tensions between the world’s two leading economies have escalated recently, especially in the solar-panel industry. Protectionist sentiment has grown in the US as economic uncertainty has grown in recent months. The US has filed five trade cases against China since Barack Obama took office and 12 since China joined the WTO in 2001.

China said it will fight back against protectionist measures in a statement in a late November statement by Commerce Minister Chen Deming.

Observers foresee China becoming enmeshed in more trade disputes as its exports continue to surge at a much faster rate than global economic growth. Though China’s imports have been growing at an even faster rate this year, they are building on a smaller base, resulting in continuing large trade surpluses with the US and the European Union. Its trading partners are also becoming concerned about China’s state support for strategic industries.