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China Slams U.S. Tariffs on Tires as 'Serious Act of Trade Protectionism'

BEIJING - China strongly opposed President Barack Obama's decision to impose punitive tariffs on imports of car and light truck tires calling it protectionism that violates World Trade Organization rules.

New tariffs send a wrong signal to the world ahead of the upcoming Group of 20 nations in Pittsburgh Sept. 24-25, and could spark a chain reaction of trade protectionist measures that slow economic recovery, a notice on the Ministry of Commerce Web site said Saturday.

Such actions will harm U.S.-China economic and trade relations, it said.

China reserves the right to react, Ministry of Commerce spokesman Yao Jian said Saturday, without giving details.

For the Chinese government, the tire dispute threatens an economic relationship crucial to the country's economic growth. Chinese officials had previously appealed to Washington to avoid taking steps that might harm relations.

"China strongly opposes this serious act of trade protectionism by the U.S.," the ministry statement said. "This act not only violates the rules of the World Trade Organization but also violates the relevant commitments made by the U.S. government at the G-20 financial summit."

Obama had until Sept. 17 to accept, reject or modify a U.S. International Trade Commission ruling that a rising tide of Chinese tires into the U.S. hurts American producers. A powerful union, United Steelworkers, blames the increase for the loss of thousands of American jobs.

The Chinese government will continue to adopt necessary measures to support its tire industry to deal with the negative impact caused by the case, the statement said. China also reserves the right to bring the case to the WTO.

Chinese officials have said the case was prompted by financial problems suffered by U.S. auto and tire producers caused by the global economic crisis. American producers have blamed China for decreasing profits.

Many Chinese analysts, however, believe U.S.-China economic ties are too important for the governments to risk upsetting them.

The federal trade panel recommended a 55 percent tariff in the first year, 45 percent in the second year, and 35 percent in the third. Obama settled on slightly lower penalties -- an extra 35 percent in the first year, 30 percent in the second, and 25 percent in the third, White House press secretary Robert Gibbs said Friday.

The steelworkers union brought the original case in April, accusing China of making a recent push to unload more tires ahead of Obama's expected action. The union says more than 5,000 tire workers have lost jobs since 2004, as Chinese tires overwhelmed the U.S. market.