China to impose duties on cars imported from U.S.

BEIJING (Reuters) -- China said today it would impose anti-subsidy and anti-dumping duties on imported cars made in the United States, the latest in a series of trade spats between the world's two largest economies.

The duties, to affect the Detroit 3 and some U.S. units of foreign automakers, will begin tomorrow and last two years, the Commerce Ministry said on its Web site. Cars that have engine capacity at or above 2.5 liters will be hit with duties ranging from 2 percent to 21.5 percent.

General Motors Co. will face anti-dumping and countervailing duties ranging from 8.9 percent to 12.9 percent. Chrysler Group's will range from 6.2 percent to 8.8 percent, while the U.S. units of BMW AG and Mercedes-Benz will face duties of 2 percent and 2.7 percent, respectively.

The United States is "very disappointed" with China's decision to impose punitive duties on U.S. auto imports to offset alleged unfair trade practices, a spokeswoman for the U.S. Trade Representative's office said today.

"The United States has previously indicated that China's... investigations of imports of automobiles from the United States appeared to have significant problems," said spokeswoman Carol Guthrie.

The China ministry's statement said U.S.-made cars and SUVs benefited from subsidies and had been dumped into the China market, causing "substantial damage to China's domestic industry".

U.S.-China trade tensions have been mounting in recent months, particularly in the solar industry, where tit-for-tat trade probes have underscored leaders' warnings of a rising tide of protectionism amid gloomy global economic forecasts.

Ten years after China joined the World Trade Organization, experts say it is likely to become more deeply enmeshed in trade disputes.

More problems for Beijing at the trade governing body will be partly due to its ever-expanding trade footprint, but also because many of its trading partners have growing concerns over what they see as state support for strategic industries.

The United States has filed 12 trade cases against China since it joined the WTO, five since U.S. President Barack Obama took office.

China's Commerce Minister Chen Deming said in late November the country is likely to fight back if other countries resort to trade protectionism.

Bloomberg contributed to this report.