China Imposes New Tariffs on US Auto Imports

Posted December 14th, 2011 at 1:10 pm (UTC-5)
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China says it will impose new taxes on certain U.S.-made vehicle imports, in the latest move to test the strained U.S.-China trade relationship.

China's Commerce Ministry said beginning Thursday it will impose duties from two to 2.5 percent on imported passenger cars and sport utility vehicles with engine capacities of 2.5 liters or more.

In response, a spokesperson for the U.S. Trade Representative told the French news agency that Washington is disappointed in China's decision. He said U.S. officials will discuss the move with Congress and others to determine the best response.

China says it is imposing the tariffs because it found that Chinese automakers experienced major damage because of U.S. vehicle imports it said were dumped into the Chinese market at prices below the cost of production.

The duties will affect vehicles produced by General Motors, Chrysler, Ford, Mercedes-Benz U.S. International, BMW Manufacturing and American Honda Motor.

China and the United States, the world's two largest economies, have been locked in a trade battle over various issues, including Chinese solar panels, American chickens and what Washington sees as the artificially low value of China's currency.

American lawmakers have been increasing their demands for punitive tariffs on Chinese goods if Beijing fails to ease controls that keep its currency undervalued and gives its exporters an unfair trade advantage.

U.S. officials have long accused China of keeping its currency artificially low, a policy that helped send the U.S. trade deficit with China to more than $270 billion in 2010.