Restricting the import of Chinese products cannot relax the competition facing U.S. domestic companies, or solve their real problems, Yao said, adding that the U.S. market will only turn to other countries to find substitutes for imports from China.

The restrictive measure would greatly raise U.S. consumers' auto purchase costs, he said. Moreover, it could weaken the considerable achievements of the U.S. Government's efforts to revive its troubled auto industry.

At the same time, some U.S. consumers might postpone their plans to change tires because of increasing tire prices, which could be a hidden threat to driving safety in the United States.

Yao said China hopes Washington will cooperate with China to create a sound environment for bilateral trade and economic relationship. The U.S. side, he added, should encourage its companies to enlarge exports to China in a bid to realize bilateral trade balances.

At the same time, he said, it is important not to resort to punitive methods of restraining imports.

In fact, related U.S. industrial unions have strongly opposed the decision of the White House. The U.S. Tire Industry Association, for one, issued a statement on June 17 protesting the ITC's suggestion of restraining China-made tires from entering the U.S. market.

The association pointed out that such an act could seriously damage the interests of U.S. consumers and employees in the overall tire retail and distribution businesses. The U.S. Retail Industry Leaders Association also told U.S. Trade Representative Ron Kirk in a letter that restraining China-made tires fails to serve U.S. public interests.

It is interesting to note that it was not the U.S. tire industry that launched the case, but rather the United Steelworkers—which hardly has any connection with tire business.

To China, the White House's decision to levy punitive tariffs on Chinese tires will definitely lead to losses. Currently, more than 40 percent of total China-made tires are made for export.

Indeed, if China loses half its exports to the United States, exporters may lose $1 billion, and the employment of 100,000 tire workers may be jeopardized, according to the China Rubber Industry Association.

Besides, according to WTO rules, since Obama has approved the special safeguard measure against Chinese tires, other countries can directly invoke the U.S. plan.

MOFCOM's Yao Jian pointed out that world leaders have reiterated their determination to oppose trade protectionism on different occasions, including the G20 summit, since the global financial crisis burst out.

Washington's imposition of high tariffs on China-made tires violated an agreement by the international community, he said, and would trigger a chain reaction of protectionism worldwide. This could also slow down the revival of the world economy, Yao added.

Chinese reaction

The China Rubber Industry Association, as well as other industrial associations and the affected firms, expressed strong protest in a petition to Obama on September 12. The signatories also said they had urged the Chinese Government to adopt retaliatory measures against U.S. products.

On September 13, MOFCOM retaliated by announcing anti-dumping and anti-subsidies investigations into some U.S.-produced chicken products and automobiles, in accordance with both Chinese law and WTO regulations.

The ministry said it was acting on complaints from Chinese manufacturers of related industries. They alleged that such U.S. products were being exported to China with "unfair means" including dumping, often coupled with U.S. governmental subsidies.

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, has pointed out that the volume of the U.S. targets of China's anti-dumping investigation was about $2 billion—similar to the amount of China-made tires exported to the United States.

From this perspective, China's response actually was a revenge of trade, Mei said.

Although the world economy has shown positive changes, a long time remains before it can realize a revival, said Minister Chen Deming.

At this point, trade protectionism can do nothing but slow down economic revival and even fasten the spread of economic recession, he said. Chen called on all countries and regions to realize the dangers of trade protectionism, and honor their promises to guard against the trend.

China is willing to solve trade frictions with its trade partners through dialogues and negotiations, so as to maintain a good international trade and economic environment, he said.

Meanwhile, Chen added, it will strengthen an early warning and response mechanisms, while supporting Chinese industrial unions and companies in enhancing their ability to deal with trade frictions.

Turning to the WTO

The Chinese Government filed a formal complaint to the World Trade Organization (WTO) on September 14 over steep U.S. tariffs imposed on China-made tires.

Under the WTO's dispute settlement system, the two countries will now have 60 days to try to resolve the dispute through consultations. If these talks fail, China can go further by requesting a WTO panel to investigate and rule on the case.

"China's request with the United States for consultations is based on the normal practice of WTO members under the dispute settlement mechanism and concrete action by China to protect its own interests," the Chinese mission to the Geneva-based WTO said in a statement.

The Chinese mission expressed hope that "all sides will understand its determination to fight firmly against trade protectionism to jointly safeguard the multilateral trading system by respecting WTO rules."

WTO chief Pascal Lamy also showed concern about the case, saying the U.S. move could increase the risk of a "tit-for-tat spillover."

"Both the United States and China are members of the G20," he said, "and the G20 has taken this stance that they shouldn't have recourse to trade restrictive measures during the crisis."

(Source: Xinhua News Agency)