Tariff to hurt China's tire industry

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Latest figures from the Commerce Ministry show a growing number of anti-dumping and safeguard measures against Chinese exports in 2009. There has been 60 investigations against Chinese products, approaching the 73 cases for 2008. CCTV reporter takes closer look at what impact it would have on China's tire industry and foreign trade, if U.S. President Barack Obama backs the tariff on Chinese tires.

The request to levy duties on Chinese tires is under a provision as part of China's deal to join the World Trade Organization. It allows member countries to seek temporary protection from a dramatic surge in Chinese imports which could severely damage industries, and would allow domestic manufacturers time to adjust. The provision lasts until December 11th, 2013.

Conservative estimate shows if the case should be passed, the measurers could cost 100-thousand Chinese tire workers their jobs and around 1.7 billion US dollars in trade losses. China exports around 140 million tires to the US. If the export is cut by half, it will cause overcapacity in China's tire industry. And expert says, there could be an even worse outcome.

Zhou Shijian, Senior Research Fellow of Center for China-US Relations, Tsinghua University said "Once the US decides to adopt the tariffs, it will fuel protectionism against China in the US. It will lead to more investigations against other countries. It will also set an example for other W-T-O member countries to curb China's imports."

His worries are turning to reality just when China and US are debating about the tariff dispute, Brazil's trade commission followed suit, adding tariffs to some Chinese tire exports entering their country.