China punishes America for unfair trade practices
YES, you read that right:China will levy anti-dumping and anti-subsidy duties on certain US vehicle imports, the commerce ministry said Wednesday, a move likely to fuel tensions between the world's two biggest economies.The tariffs will be applied for two years to passenger cars and sports utility vehicles with engine capacities of 2.5 litres or more and will take effect Thursday, the ministry said in a statement.The decision will affect vehicles produced by General Motors, Chrysler Group, BMW Manufacturing, Mercedes-Benz US International, American Honda Motor and Ford Motor.The move is likely to further strain ties between Beijing and Washington, which have recently locked horns over solar panels, chickens and the value of the Chinese currency.China said the investigation into US auto imports found domestic vehicle manufacturers had "suffered substantial damages" due to the dumping and subsidies.The anti-dumping penalties range from 2.0 percent to 21.5 percent while the anti-subsidy tariffs will be set at a maximum 12.9 percent, the ministry said.More here. Chinese media says the move will only apply to 50,000 vehicles, but the symbolic impact may be significant. The tariff would appear to be a shot fired across the bow of an American government that has recently inched closer toward identifying China as a currency manipulator, thereby enabling the Treasury to impose tariffs on Chinese goods. It may well be read as a sign of weakness within China, however, particularly given the erosion in the global economic picture ahead of the looming transfer of power.