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China decries US trade penalty on tires

A Chinese worker moved tires at a factory in Beijing. US unions said Chinese tire imports are hurting American workers. A Chinese worker moved tires at a factory in Beijing. US unions said Chinese tire imports are hurting American workers. (Ng Han Guan/ Associated Press)
By Jennifer Loven
Associated Press / September 13, 2009

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WASHINGTON - President Obama’s decision to impose trade penalties on Chinese tires has infuriated Beijing at a time when the United States badly needs Chinese help on climate change, nuclear standoffs with Iran and North Korea, and the global economy.

China condemned the White House’s announcement late Friday as protectionist and said it violated global trade rules. At home, the punitive tariffs on all car and light truck tires imported from China may placate union supporters who are important to the president’s health care push.

To the White House, it was “simply about enforcing the rules of the road and creating a trade system that is based on those rules and is fair for everyone,’’ spokesman Robert Gibbs said yesterday.

Chen Deming, China’s minister of commerce, said the penalties would hurt US-China relations. A ministry statement said Obama had “compromised to the political pressure of the US domestic trade protectionism.’’

Obama had until this Thursday to accept, reject, or modify a US International Trade Commission ruling that a rising tide of Chinese tire imports is hurting American producers. The United Steelworkers blames the increase for the loss of thousands of American jobs.

The federal panel recommended a 55 percent tariff in the first year, 45 percent in the second year, and 35 percent in the third year. Obama settled on 35 percent the first year, 30 percent in the second, and 25 percent in the third, Gibbs said

“For trade to work for everybody, it has to be based on fairness and rules,’’ Gibbs said.

The new tariffs, on top of an existing 4 percent tariff on all tire imports, take effect Sept. 26.

US officials are working with the Chinese and other nations to plan a an economic summit in Pittsburgh on Sept. 24-25 of the 20 leading rich and developing nations. China will be a major presence at the meeting, and the United States will be eager to show it supports free trade.

Many of the nearly two dozen world leaders Obama is hosting have made strong statements critical of countries that protect their key industries.

Governments around the world have suggested the United States talks tough against protectionism only when its own industries are not threatened. US rhetoric on free trade also has been questioned because of a “Buy American’’ provision in the US stimulus package.

The tire decision could have ramifications on issues such as the nuclear disputes with Iran and North Korea and on efforts to address climate change. China is the world’s third-largest economy and a veto-holding member of the UN Security Council.