China Ratchets up Trade Tensions, Imposes New Tariffs on U.S.-Made Autos

The Chinese government announced today that it will begin imposing anti-dumping and anti-subsidy tariffs on vehicles made in and imported from the United States.

Detroit’s Big 3 automakers, as well as some U.S. units of overseas automakers, will be affected by the new duties which are set to go into effect tomorrow and will be in place through December 14, 2014 according to information posted on the Chinese Commerce Ministry’s Web site.

The tariffs will range between 2 percent and 21.5 percent and will be levied on vehicles with engine capacities of 2.5-liters and above.

Anti-dumping and countervailing duties ranging from 6.2 percent to 8.8 percent will be levied on Chrysler vehicles. General Motors vehicles will face higher duties ranging from 8.9 percent to 12.9 percent.

Ford Motor Company will be unaffected by the new tariffs. The company’s only export to the China market is the Ford Edge, which is made in Canada.

U.S.-based divisions of Mercedes and BMW will face duties of 2.7 percent and 2 percent, respectively.

The Chinese Commerce Ministry claims that cars and SUVs made in the U.S. have benefited from government subsidies and that the act of dumping them in the China market has caused “substantial damage to China’s domestic industry.”

Tensions between Washington and Beijing have increased in recent months, leading to increases in protectionist rhetoric.

China is now deeply embroiled in a number of trade disputes and many experts now predict that the situation to worsen in the short term.

At the root of most of China’s trade are resentment over the country’s growing impact on global trade and suspicion about Beijing’s heavy-handed policies concerning strategic industries.

In the ten years since China joined the World Trade Organization, the U.S. has filed a dozen complaints about what it feels are unfair trade practices. Five of those complaints have been filed in the last three years, by the Obama administration.

Some auto industry experts don’t’ expect the latest wave of duties to have a great impact on sales of the affected vehicles.  In an article for China Car Times, automotive journalist Ashley Sutcliffe wrote, “Chinese luxury car buyers are unlikely to be put off buying American made cars by the additional percentages added to their car prices.”

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