U.S. ‘Very Disappointed’ By China’s New Auto Import Tariffs

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Photo-Illustration by Alexander Ho for TIME; Getty Images

U.S. trade officials are “very disappointed” in China’s decision to impose new import tariffs on several U.S. auto manufacturers, including Ford, GM and Chrysler, a spokesperson for the U.S. Trade representative wrote in a statement on Wednesday. The pointed response comes after the Chinese trade ministry announced the new duties, adding a new trade dispute to the growing friction between the world’s largest economy and the world’s most populous nation.

China accuses the U.S. of unfairly subsidizing it own automakers, as well as foreign companies with U.S.-based production facilities — a policy that inflicts “substantial damage to China’s domestic industry,” according to a trade ministry statement cited by Reuters.

“We are very disappointed in this action by China,” U.S.T.R spokesperson Carol J. Guthrie said in a statement. “We will be discussing this latest action with both our stakeholders and Congress to determine the best course going forward.”

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The new import tariffs come as relations between China and the U.S. are becoming increasing fractious. U.S. officials have accused China of unfairly manipulating its currency, harming the U.S. economy. Republican presidential candidates have been hammering away at China on the campaign trail, warning that the U.S. risks losing its global standing as China gobbles up more and more U.S. debt. Meanwhile, the U.S. has signaled in recent weeks that it intends to take a more active role throughout the Pacific Rim, as President Obama and Secretary of State Clinton made clear during a recent trip to the region. U.S. and Chinese defense officials met in Beijing earlier this month in an effort to diffuse the recent tensions.

China’s new auto tariffs affect larger U.S.-made cars and SUVs, and would impose duties ranging from 2% to 21.5%, over the course of two years. In 2009, China surpassed the U.S. to become the largest auto market in the world, but the country has struggled to develop its own domestic car industry. The new tariffs, which would make U.S.-made cars more expensive for Chinese consumers, could provide a boost for its own domestic auto producers.

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The auto tariff dispute is just the latest trade flare-up between the two countries, which have accused each other of “protectionism,” or favoring their own domestic products at the expense of foreign-made goods. U.S.T.R. spokesperson Guthrie said the the U.S. has “moved swiftly” to challenge other Chinese trade policies — one involving steel products used in the renewable energy sector; another involving chicken broiler products — that it believes violate World Trade Organization free trade rules. Earlier this month, a U.S. international trade panel voted to probe whether Chinese firms have been dumping low-priced solar panel products onto the U.S. market, harming domestic firms.