Participants at an automobile parts show in Beijing chat at a booth displaying tires. [China Daily]

Chinese automobile tire producers and exporters are actively responding to the US investigation against them, with assistance from local industry associations and the Ministry of Commerce.

The producers said the case is discriminative, and an indicator that the US side expects to counter the losses of American tire companies by cracking down on Chinese tire exports or rather the case of using a trade protectionism tool.

In late April, the United Steelworkers (USW), which represents 15,000 American tire factory workers from 13 plants, filed a petition with the United States International Trade Commission (USITC) to reduce imports of automobile tires from China by more than half to 21 million, the level of 2005, claiming that Chinese producers are benefiting from the subsidies granted by the Chinese government and consequently affecting the US tire industry.

The US purchased 46 million tires from China in 2008, valued at US$1.7 billion, said the USW, which also claimed subsidy margins for Chinese tire producers range from 2.38 to 6.59 percent.

The USITC later accepted the petition and announced that it will be probing into the case. This is the seventh time that the US has conducted a subsidy-related investigation against China, and the largest by volume terms.

In the past week, Chinese Rubber Industrial Association (RIA) has met with major tire enterprises twice and discussed ways to deal with the petition. The local players have been asked to fill up a questionnaire and submit it to the USITC by Thursday, said Tan Yukun, an employee with the tire section of RIA.

Based on the information collected from the questionnaire, the USITC will make a final decision within six months, he said.

"The case is unreasonable. They (American tire producers) are uncompetitive, but ridiculously, they try to put the blame on Chinese players," Cai Yufeng, US business director of Hangzhou-based Zhongce Rubber, told China Daily.

It's not only Zhongce that is passionate on fighting back. Jiang Guibo, general manager with the US Department under Shandong Linglong Tyres, said, "we are disappointed about it. We will try to provide enough accurate and complete proof to show we are not subsidized."

"Chinese tires are cheaper but still qualified and that is why overseas sales are still not that bad. The US behavior is nothing but trade protectionism," he said.

Linglong Tyres is China's fourth largest tire producer and also the largest exporter.

From February, Linglong's exports to the US grew mildly compared to a drop since November 2008, Jiang said.

(China Daily May 5, 2009)