China allays US trade war fears

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China has said it does not think its trade disputes with the US will hurt ties between the two countries, playing down the threat of a trade war.

The US imposed tariffs on Chinese tyre imports on Friday. China then requested talks, under World Trade Organisation (WTO) rules, over the issue.

"We don't want to see anything bad happen to bilateral relations," the Chinese commerce ministry said.

China has called America's move on tyres "protectionist".

Under WTO rules, Beijing and Washington will try to solve the dispute over the next 60 days through negotiations.

If that fails, China can ask for a WTO panel to make a ruling on tyre imports.

'Groundless'

"The US judgement about the disturbance is groundless," the Chinese commerce ministry said.

"During the Chinese-US negotiations, the US side never gave feedback on whether Chinese tyre products disturbed local markets," it added.

On Friday, under pressure from US unions, the White House announced duties of an additional 35% on Chinese-made tyres for one year, followed by tariffs of 30% and 25% in the following two years.

It said it was in order "to remedy a market disruption caused by a surge in tyre imports".

The tariffs come under so-called "safeguard" rules introduced when China joined the WTO, to prevent the possibility of China flooding the US market with its goods.

President Barack Obama is the first to use the safeguard rules.

Larry Summers, director of Mr Obama's National Economic Council, said Washington had tried to negotiate a solution with Beijing but those talks failed.

It would be an "abdication of responsibility" to not impose the duties, he said.

Tyres surge

The US imported about 46 million tyres from China last year, more than three times as many as in 2004. The Chinese share of the market went from less than 5% to 17% in that period.

On Sunday, China's state-run media quoted experts saying that 100,000 Chinese jobs could be lost as a result of the US tariffs.

Shares in US tyremakers gained on the announcement. Goodyear Tire closed 3% higher on Monday, and Cooper Tire & Rubber Co shares rose as much as 13%.

But Chinese tyremakers fell. Double Coin fell 10%, which is the daily limit to stock fluctuations.

Shanghai-listed Giti Tire said the US tariffs would have a "negative impact" on its business as tyre exports to the US accounted for about 25% of its revenues last year.

Separately, foreign direct investment in China rose at an annual rate of 7% to $7.5bn (£4.5bn) in August, after plunging over the previous two months, the commerce ministry said.

That compares with declines of 35.7% in July and 6.8% in June.