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China commentary warns of job losses in tyre spat

Published 09/02/2009, 08:11 PM
Updated 09/02/2009, 08:15 PM

BEIJING, Sept 3 (Reuters) - About 100,000 Chinese and more than 10,000 Americans could lose their jobs if the United States goes ahead and restricts tyre imports from China, the official Xinhua news agency said on Thursday.

The U.S. Trade Representative was due to give President Barack Obama its recommendations in the case on Wednesday. That begins the final stage of deliberation in which Obama is required under U.S. trade law to announce a decision within 15 days.

U.S. tyre imports from China totalled about 46 million in 2008, or triple the 15 million in 2004.

The U.S. could impose steep duties on imports of Chinese tyres to prevent a flood of imports -- under provisions China agreed to when it joined the WTO.

"The case has become an opportunity for some politicians at the centre of U.S. partisan politics to make a show," Xinhua said in the English-language commentary.

"However, the U.S. government is strongly expected to take into account the long-term development of Sino-American trade relations in making its decision.

"If the punitive duties being called for by some politicians and trade protectionists are imposed, more than 10,000 Americans in the tyre distribution and retail sectors may lose their jobs, along with about 100,000 Chinese manufacturing workers."

It said U.S. firms investing in China would also suffer.

The case would signal the Obama administration's position on industry requests for relief from cheaper Chinese imports. The Bush administration turned down similar requests for relief.

A delegation from the Chinese Ministry of Commerce visited Washington last month to lobby against the tyre tariffs.

Making an appeal against the legality of the U.S. tariffs at the WTO would be more in China's interests than a damaging, tit-for-tat trade war, as its economy is export-dependent.

Other U.S. industries are lined up to file complaints, should the Obama administration approve the tariffs.

On Aug. 19, the U.S. International Trade Commission began an investigation of magnesia carbon bricks, a raw material used in steelmaking, from China and Mexico, at the request of U.S. producer Resco Products Inc.

Xinhua said as each other's second largest trade partners, the Washington and Beijing's interests were "closely intertwined. Any trade frictions may lead to major losses on both sides.

"With the global economy showing early signs of recovery, the international community should work harder to strengthen cooperation and try to avoid trade friction and curb protectionism," it added.

"The U.S. leadership is responsible for making a rational decision as part of the efforts to boost bilateral trade ties, which are vital to the global economic recovery." (Reporting by Ben Blanchard; Editing by Ken Wills and Ron Popeski)

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