China slaps import duties on U.S. cars

China has imposed duties on imports of some U.S.-made vehicles, claiming damage from foreign automakers due to dumping and subsidies in the latest round of trade friction between the two countries.

The Commerce Ministry said Wednesday that the duties would be imposed for two years on imported cars and sport utility vehicles with engine displacements of over 2.5 litres.

The duties range from two per cent to 21.5 per cent.

The ministry's notice named General Motors, Chrysler, Mercedes-Benz U.S. International, BMW's factory in Spartanburg, S.C., and Honda of America Manufacturing as among the companies affected.

China and the U.S. are at odds over a slew of trade issues. Beijing also has imposed tariffs on imports of U.S. chicken, among other products, while the U.S. has filed complaints against Chinese tariffs on steel and subsidies for wind power equipment.

In October, seven U.S. solar panel companies filed a federal trade complaint against Chinese companies they accuse of dumping solar products on global markets to depress prices.

U.S. trade officials have long complained that China's own subsidies to its auto industry, along with preferential access to cheap credit from state-owned banks, amount to unfair trade practices.

Under international trade rules, countries are allowed to impose punitive tariffs to offset damage from both dumping and unfair subsidies.

The Commerce Ministry said its investigation had found "substantial damage" to its automakers caused by dumping and subsidies.

General Motors, in a statement, said it was working with its partners to gauge the impact of China's decision and to "seek a solution consistent with a constructive global trade environment."

GM's imports amount to less than half of one per cent of its domestic production in China, the company said.

China's domestic automakers have been struggling to keep or gain market share in recent months as demand has slowed after years of torrid growth. Meanwhile, foreign-branded autos, made in China or imported, have fared better among Chinese car buyers who apparently believe they offer better quality or image value.