WTO panel to probe U.S. tariffs on Chinese tires

Shanghai, January 21 (Gasgoo.com) the World Trade Organization (WTO) on Tuesday set up a panel to investigate whether U.S. tariffs on passenger and light truck tires made in China violate WTO policies, Xinhua reported.

The panel was established at a meeting of the WTO's Dispute Settlement Body (DSB), at which China reiterated its position that the U.S. tariffs "run short of factual bases and breached the U.S. obligations under the WTO."

In December 2009, China formally petitioned the WTO to look into the three-year tariffs, which U.S. President Obama ordered Sept. 11 on the recommendation of the U.S. International Trade Commission (ITC). The tariffs are 35% the first year, 30% the second year and 25% the third year on top of the 4% duty in place at that time.

In its April 2009 petition to the ITC, the United Steelworkers (USW) union said the U.S. tire manufacturing industry lost more than 5,100 jobs and 10.3% of its capacity utilization because of skyrocketing Chinese tire imports to the U.S. between 2004 and 2008.

WTO dispute settlement panels usually consist of three industry experts. It generally takes the WTO up to 45 days to appoint the panel, and the panel generally takes at least six months to consider the issue and write a final report.

The U.S. imported about 46 million tires from China in 2008, three times as many as in 2004. In that time, China's share of the U.S. market went from less than 5% to almost 17%.

The Chinese government calls the U.S. tariffs protectionist, and notes that its exports of vehicle tires, usually of low-end models, to the U.S. fell by about 15% in the first half of 2009.