China slaps tariffs on some US auto imports

China will levy anti-dumping and anti-subsidy duties on certain US vehicle imports, the commerce ministry said Wednesday, a move likely to fuel tensions between the world's two biggest economies. The tariffs will be applied for two years to passenger cars and sports utility vehicles with engine capacities of 2.5 litres or more and will take effect Thursday, the ministry said in a statement. The decision will affect vehicles produced by General Motors, Chrysler Group, BMW Manufacturing, Mercedes-Benz US International, American Honda Motor and Ford Motor. The anti-dumping penalties range from 2.0 percent to 21.5 percent while the anti-dumping tariffs will be set at a maximum 12.9 percent, the ministry said. China overtook the United States in 2009 to become the world's biggest auto market. Most cars sold in China are produced in the domestic market through joint ventures between Chinese and foreign automakers. The majority of luxury cars are still imported. The country's auto sales rose more than 32 percent last year to a record 18.06 million units, but the sector has since lost steam after Beijing phased out sales incentives such as tax breaks for small-engine vehicles. The industry group has said it expects sales growth for 2011 to be just five percent, down from an earlier forecast of 10-15 percent.