China to Impose Retalitory Duties on US Made Cars from This Year
Friction between China and the USA has always been high, but now the Chinese government has decided to impose new taxes on American made vehicles that have a displacement of 2.5L and above. The new tax comes as both countries accuse one another of introducing new taxes and laws to protect their domestic market and producers. Last week the Chinese government chose to take the USA to the World Trade Organization in a row over America’s poultry exports which China described as being illegal under WTO rules.
The new tax will be introduced from December 15th 2011 and will run until December 14th 2013, the tax is largely seen as a symbolic action by the Chinese government and could be seen as a warning shot to the USA that access to the world’s largest auto market could potentially be turned off. Sales of US made vehicles of 2.5L and above are rather low in China, although it does affect several foreign manufacturers that have their manufacturing and exporting facilities in the USA. The new duties will be from 2% to 22% depending on the amount of subsidies offered by the US government to manufacturers that export their product.
