Obama slaps duties on tire imports from China

By Doug Palmer

WASHINGTON (Reuters) - U.S. President Barack Obama slapped steep additional duties on tire imports from China on Friday in a move that pleased domestic labor groups but drew a strong rebuke from Beijing.

"The president decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case," White House spokesman Robert Gibbs said in a statement.

China swiftly denounced the decision.

"China strongly condemns this grave act of trade protectionism by the U.S.," the spokesman for China's Ministry of Commerce, Yao Jian, said in a statement issued on the Ministry website (www.mofcom.gov.cn) Saturday.

"This step not only violates the rules of the World Trade Organization, it is also contrary to the relevant commitments that the United States government made at the G20 financial summit."

The United Steelworkers union, which represents workers at many U.S. tire production plants, filed a petition earlier this year asking for the protection.

It said a tripling of tire imports from China to about 46 million in 2008 from about 15 million in 2004 had cost more than 5,000 U.S. tire worker jobs.

An additional 35 percent duty will be placed for a year on Chinese-made passenger vehicle and light truck tires, the White House said in a statement.

The new duty will take effect on September 26 and comes in addition to an existing 4 percent duty. It would fall to 30 percent in the second year and 25 percent in the third year, the White House said.

Those levels are lower than the U.S. International Trade Commission had recommended, but likely still high enough to restrict tire imports significantly from China, if not shut them out completely.

"For far too long, workers across this country have been victimized by bad trade policies and government inaction. Today, President Obama made clear that he will enforce America's trade laws and stand with American workers," United Steelworkers President Leo Gerard said.

Trade skeptics in Congress also cheered the move.

"Today, the President courageously stood up and enforced fair trade rules that will save jobs and help our communities," said Senator Sherrod Brown, an Ohio Democrat.

Tires are merely the latest of many Chinese-made products to face U.S. protective restrictions.

Beijing tends to respond to such restrictions by denouncing them and sometimes imposing apparent tit-for-tat measures on U.S. products, without launching broader trade wars. It has also turned increasingly to the World Trade Organization to press its case.