China is rejecting Washington’s claims that it has broken trade rules by flooding the US market with tyres.
Beijing has released figures showing tyre exports to the US actually fell by more than 15 percent in the first half of this year.
After Washington slapped an extra 35 percent duty on Chinese tyres, China lodged a complaint at the World Trade Organisation.
Zhang Hanlin, President of the China Institute for World Trade Organisation Studies said: “If the exports to any WTO member grow too quickly, and so harms their own national industries, and if the harm comes from Chinese products, only in that situation could you do what the US government has done. But at the moment, the problems of America’s tyre, car and even steel industries are not caused by China.”
China now wants consultations with the US over the tyre tariffs, a preliminary step toward seeking a ruling by the WTO.
So can a trade war be headed off? Lawyer Daniel Price, who worked on economic issues at the Bush White House, is not sure: “I certainly hope it won’t spiral out of control. And it need not spiral out of control, the US-China relationship is very important and complex and one that has lots of facets.”
One facet is the big imbalance in trade between China and US which Washington would like to reduce.
It was lower in the first half of this year, but only because the recession has caused a fall in imports into the US.