The international trade war between China and the US escalated yesterday after Beijing imposed additional duties on sport utility vehicles and midsize and large cars imported from the world's largest economy.
The new anti-dumping and anti-subsidy tariffs that works up to nearly 22 per cent of the import prices, is a tit for tat move against US duties on cheap Chinese tyres, rather than aimed at reducing the sales of US vehicles in China.
Imposing the new duty, China's commerce ministry, which said it conducted a two-year trade investigation on the US imports, accused the US car industry of using "dumping and subsidising" tactic to cause substantial damage to China's domestic car industry.
China launched the investigation two days after the US imposed steep tariffs on surging imports of Chinese tyres in September 2009. (See: US to slap high tariffs on Chinese tyres; China calls it protectionism)
In December 2010, the WTO ruled in favour of the US for imposing extra duties on Chinese tyre imports, in one of the several anti dumping cases filed against China by the US.
The duty will be charged on large-engine vehicles made by the US car manufacturers, as well as some European car makers, who have their factories in the US.