China has said it will impose anti-subsidy and anti-dumping duties on imported cars made in the United States.
The two year implementation period will run from 15 Dec 2011 to 14 Dec 2013. Cars manufactured in the US with an engine capacity at or above 2.5 litres will be hit with duties ranging from 2% to 21.5%.
Manufacturers potentially affected by the announcement, including Chrysler and GM, claim the impact of the duty is small. However, Chinese analysts believe imposing the anti-subsidy and anti-dumping duties is bound to increase the costs of importing American cars, if manufacturers or distributors pass the cost on to consumers with an ineviteable shock to the market for US imports in the larger engine sector.
At present, Japan, and Germany dominate the market share of imported cars to China. The imposition of duties on US-made cars could be the start of a "trade war" between the two economic giants. Some analysts have pointed to the fact that the United States has filed 12 trade cases against China since it joined the WTO, including five since U.S. President Barack Obama took office; others believe China is seeking to blame someone else for the country's economic slowdown.
China's Commerce Minister Chen Deming said in late November the country is likely to fight back if other countries resort to trade protectionism. Equally, China is, apparently, making little secret of its own presence in the US auto manufacturing industry.