China initiates another trade dispute with the United States

 China intends to take steps that could cause higher tariffs on imports of autos made by the U.S. automakers GM, Chrysler and Ford. Steve Collins, president of industry trade group the American Automotive Policy Council, announced Wednesday that China is expected to begin an investigation under anti-dumping laws into automakers industries’ business practices as soon as next week. China intends to slap tariffs on U.S. auto imports if the investigation discovers that the companies receive government subsidies, or sell products in China at below-market prices. The two countries are already fighting over steel pipes, chicken products, and pirated movies and music and the move is the latest trade dispute between them. The trade spats worsened after the Obama administration last month announced up to 35 percent duties on Chinese-made tires, to be imposed for the next three years.

The export of U.S. cars to China comes up to only about 9,000 cars annually. GM manufactures and sells more than a million cars a year in China, though those sales wouldn't be included in the investigation as the Mercedes-Benz, BMW and Nissan cars exported to China from plants in the United States. GM and Chrysler have received billions of dollars in aid from the government's $700 billion bailout fund, though Ford has not.

U.S. trade officials immediately took steps and are currently in Hangzhou, China for high-level economic talks. President Obama will make his first visit to China on Nov. 15-18.

Being an important one for the U.S. automakers, especially GM and Ford, China’s market permanently showed the growing sales. However if China does impose tariffs, it's not likely to hurt the automakers much because from hundreds of thousands of vehicles sold there by GM and Ford most are made in China. GM so far this year has sold 1.3 million cars and trucks in China, most of them built there in a joint venture with Chinese automaker SAIC. Ford has sold 316,639 vehicles in China from January through September, with last month's sales jumping nearly 80 percent from the year before. Chrysler has been pursuing partnerships in China and now only exports only a small number of vehicles to China.

This year China passed ahead the U.S. of the total auto sales, giving China a wide lead over the U.S. as the world's top auto market. Through September, 9.66 million vehicles were sold in China, up 34 percent from the same period last year compared with U.S. sales plunged 27 percent to 7.8 million units, according to Autodata Corp., a research firm. Sales in China are expected to continue climbing to 12.6 million units in 2009, while analysts say U.S. light vehicle sales for the year will wind up around the 10.5 million level.