WTO Decision on China Tire Safeguard Strengthens U.S. Position on China's Unfair Trade Practices

Press Release

The World Trade Organization (WTO) dispute settlement panel today found in favor of the United States in a dispute brought by China concerning additional duties on imports of Chinese tires under the safeguard mechanism included in China's Protocol of Accession to the WTO. The panel found that the United States acted consistently with its WTO obligations.

"Today's WTO findings prove that we can and must use trade laws to stand up for U.S. business and workers and not hesitate because of baseless allegations of WTO-inconsistency," said Ways and Means Committee Chairman Sander M. Levin (D-MI). "The safeguard helped the U.S. tire industry re-hire workers and increase production, and with the support from key Members of Congress, the Obama Administration is to be commended for continuing to stand firmly behind U.S. workers and businesses as the United States implements WTO-consistent tools to address China's unfair trade practices. "

Background from the United States Trade Representative (USTR):

On September 11, 2009, the President imposed additional duties on imports of certain passenger vehicle and light truck tires from China for a period of three years in order to remedy the market disruption caused by those imports, as determined by the U.S. International Trade Commission (USITC). This safeguard measure was imposed in response to a petition filed by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Union under section 421 of the Trade Act of 1974, as amended (19 U.S.C. § 2451). Section 421 implements the transitional safeguard contained in Section 16 of China's Protocol of Accession to the WTO.

On September 14, 2009, China requested consultations with respect to the President's determination. China alleged that the additional duties were inconsistent with the GATT 1994, the Agreement on Safeguards, and China's Protocol of Accession. China also alleged that various elements of the USITC's determination regarding market disruption were inconsistent with the Protocol of Accession. In addition, China alleged that the level and duration of the additional duties were also inconsistent with the Protocol of Accession. Finally, China alleged that the section 421 definition of significant cause was in and of itself inconsistent with the Protocol of Accession. The WTO established a panel in January 2010 to hear this dispute. The panel held meetings with the parties in June and July 2010.

The panel found in favor of the United States with respect to all of China's claims. Both sides have the right to appeal the panel's findings to the WTO Appellate Body within 60 days.

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