The World Trade Organisation’s (WTO) Appellate Body dismissed all Chinese appeals on September 5, arguing that the US’s transitional special safeguard measures for tires imported from China did not violate the rules of the organization.

In December last year, the WTO Arbitration Commission ruled that the US International Trade Commission (ITC) stated that "the rapid increase in the number of imported tires in China between 2004 and 2008 caused the tire industry to be affected". The Chinese side of this ruling expressed dissatisfaction and subsequently filed an appeal.

“We did not find any discrepancies between the United States and its responsibilities under the WTO in the ruling,” the appellate body said in the judgment.

“This is a huge victory for the U.S. and U.S. manufacturers,” said US Trade Representative Ron Kirk. “We will continue to fight for U.S. employment and business interests.”

The Appellate Body stated that it supported the Arbitration Commission's view that the approval of the United States International Trade Commission (ITC) for the large number of Chinese tire imports was an important reason for the decline in the US tire industry. The agency also agreed with the Arbitration Commission that “China cannot successfully prove that the United States does not The view that the tire industry will be properly attributed to China."

At the end of last year, the Arbitration Commission stated that the burden of proof for the three years of excessive safeguard measures should be on the Chinese side, but the Chinese side did not provide sufficient evidence; the US side has no obligation to explain why the special safeguard measures need to last for three years, nor is it obliged to explain imports from a quantitative perspective. Increase the damage caused and whether the damage is caused by other factors.

An attorney who is familiar with international law at a US law firm told Caixin reporters that the WTO ruling was to use a legal process to produce politicized results: "The entire process of the WTO is political, but the middle part is strictly following the law. The political part refers to the lawsuit filed by a certain country and how another country will enforce it after the verdict has come out."

He believes that after the appeal is over, the two countries may have long negotiations. The WTO ruling gives more advantages to the political advantage of the winning party. However, the specific impact on the two countries and their respective industries still depends on the outcome of the negotiations.

In April 2009, the United Steelworkers of the United States (USW) asked ITC for special quotas for quota restrictions on tires imported from China. The committee ruled that imported Chinese tires would be subject to special tariffs of up to 55%, 45% and 35% respectively within three years. On September 11, U.S. President Barack Obama approved the ITC ruling and agreed to impose a three-year punitive tariff on all imported cars and light truck tires from China.

Some U.S. media have said that although the tariffs imposed on China's imported tires will help China's tire industry, the current market environment makes the outlook for the U.S. tire industry still unfavorable. In a recent analyst conference call, tire company Apollo Tyres Ltd predicted that due to the slowdown in the development of the automotive industry, tire companies will be affected and it will be difficult for American tires to compete against foreign products.

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