US-China Tire Spat Unlikely To Trigger Trade War

JOE McDONALD

WASHINGTON (AP) — China's complaint Monday over new U.S. tariffs on Chinese tires raised pressure on Washington but isn't likely to incite a full-blown trade war. Each side knows its economy has too much to lose.

The United States, the world's largest economy, represents a huge market for Chinese exports. And China is the largest holder of U.S. government debt at a time when the federal deficit has swollen to record levels because of economic rescue measures.

China quickly took its case to the World Trade Organization after President Barack Obama ordered steep additional U.S. tariffs on Chinese tires for three years, including 35 percent in the first year. The increases come on top of the current 4 percent tariff.

For China, barriers on its exports to the U.S. mean job losses at home. Still, private economists say they expect both sides to avoid a conflict that would harm producers in each country.

"The big message from China to the United States is think twice, think three times before repeating this kind of relief for a U.S. industry because if you do this again, we are going to hit you again," said Gary Hufbauer, a trade expert at the Peterson Institute, a Washington think tank.