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China to Impose AD/CV Duties on U.S. Automobiles

Thursday, December 15, 2011
Sandler, Travis & Rosenberg Trade Report

According to press sources, China’s Ministry of Commerce plans to impose antidumping and countervailing duties on imports of certain automobiles from major automakers. The duties, which will take effect Dec. 19 and last for two years, will range from 2.0% to 21.5% and be levied on vehicles with an engine capacity of 2.5 liters or more. U.S.-based automakers General Motors, Chrysler Group and Ford Motor Company will reportedly be subject to the highest duties, while subject vehicles made in the U.S. by BMW, Honda and Mercedes-Benz will receive lower rates.

Press articles cite MOFCOM as saying that U.S.-made cars have benefited from subsidies and been sold in the Chinese market at less than the cost of production, causing “substantial damage to China’s domestic industry.” It is unclear if this is a reference, at least in part, to the government bailout of some U.S. automakers during the recent economic crisis. A Reuters article speculated that the Chinese duties may not be intended to inflict significant financial harm, considering that only a small percentage of automakers’ sales in China come from imports, but instead could be more of a “shot across the bow” of the U.S., where rhetoric against Chinese trade policies has continued to escalate.

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