Tire spat may affect US automakers in China

Shanghai, September 15 (Gasgoo.com) The ongoing China-U.S. trade dispute will drive tire prices higher for American consumers and also threatens to complicate business for U.S. automakers in the booming Chinese market if unresolved, Reuters reported.

The Obama administration said on Sept. 11 that it would adopt steep tariffs on tire imports from China later this month, a move tire distributors said would have the effect of raising the price of low-cost tires to U.S. consumers almost immediately.

China denounced the U.S. decision as trade protectionism and launched an anti-dumping investigation into imports of U.S. auto parts and other items, including chicken products.

The disputes threaten to draw in U.S. auto companies, most of which have joint ventures in China that produce car parts and full vehicles for the fast-growing Chinese market, which is critical for U.S. automakers looking to target growing regions.

General Motors' China sales in August jumped 112.7% year on year to 152,365 vehicles, expecting a 40% rise in full-year sales. Sales of Ford brand cars at Changan Ford grew 111% in August from a year earlier to 21,127 units. Chrysler Group is seeking a new Chinese partner to boost its growth in the China market.

China's share of the U.S. tire market grew to 17% in 2008 from 4.7% in 2004 as tire makers increasingly looked to lower-cost regions to produce low-priced tires. The disputes may leave manufacturers wondering where to distribute their China-made tires.

The new duties of 35% on Chinese tire imports will take effect Sept. 26 and add to an existing 4% duty. The duties would fall to 30% in the second year and to 25% in the third year.