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China to pursue trade case against US automakers

(Agencies)
Updated: 2009-10-29 10:21

WASHINGTON: China has told the US that it will take steps that could lead to higher tariffs on imports of autos made by GM, Chrysler and Ford.

Steve Collins, president of industry trade group the American Automotive Policy Council, said Wednesday that US officials have told the three Detroit automakers that China is expected to begin an investigation under anti-dumping laws into their business practices as soon as next week.

If the investigation concludes that the companies receive government subsidies, or sell products in China at below-market prices, China could slap tariffs on US auto imports.

The move is the latest trade dispute between the two countries, which are already fighting over steel pipes, chicken products, and pirated movies and music. The trade spats worsened after the Obama administration last month announced up to 35 percent duties on Chinese-made tires, to be imposed for the next three years.

The US auto companies export only about 9,000 cars to China annually, Collins said. GM manufactures and sells more than a million cars a year in China, though those sales wouldn't be affected. Mercedes-Benz, BMW and Nissan also export cars to China from plants in the United States, but those won't be included in the investigation, Collins said.

GM and Chrysler have received billions of dollars in aid from the government's $700 billion bailout fund, though Ford has not.

An e-mail to a spokeswoman for US Trade Representative Ron Kirk was not immediately returned. US trade officials, including Kirk and Commerce Secretary Gary Locke, are currently in Hangzhou, China for high-level economic talks. President Obama will make his first visit to China on November 15-18.

Greg Martin, a spokesman for GM in Washington, said GM wanted to study the documents before commenting. Ford spokesman Mike Moran and Chrysler spokeswoman Linda Becker deferred comment to the trade group, and messages were left for two Chrysler spokeswomen Wednesday evening.

"The documents containing the charges were presented to the US government this week but have not yet been translated. Therefore we are not in a position to comment at this time," Collins said in a statement.

China is an important market for the US automakers, especially GM and Ford, whose sales have been growing there while developed markets like the US and Europe sputter.

Yet if China does impose tariffs, it's not likely to hurt the automakers much. GM and Ford sell hundreds of thousands of vehicles there, but most are made in China. GM so far this year has sold 1.3 million cars and trucks in China, most of them built there in a joint venture with Chinese automaker SAIC.

Ford also builds most of the vehicles it sells in China at factories there, but has only a 2 percent market share. Last month the Dearborn, Michigan, automaker announced plans to build a new assembly plant in China to make the next-generation Focus compact car.

Ford has sold 316,639 vehicles in China from January through September, with last month's sales jumping nearly 80 percent from the year before.

Chrysler has been pursuing partnerships in China and now only exports only a small number of vehicles to China.

Total auto sales in China so far this year have surpassed those in the US, giving China a wide lead over the US as the world's top auto market. Through September, 9.66 million vehicles were sold in China, up 34 percent from the same period last year.

During the same time, US sales plunged 27 percent to 7.8 million units, according to Autodata Corp., a research firm.

Sales in China are expected to continue climbing to 12.6 million units in 2009, while analysts say US light vehicle sales for the year will wind up around the 10.5 million level.