China announces new 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 move is likely to further strain ties between Beijing and Washington, which have recently locked horns over solar panels, chickens and the value of the Chinese currency.

The United States said it was "very disappointed" by Wednesday's decision.

"We will be discussing this latest action with both our stakeholders and Congress to determine the best course going forward," a spokesperson for the US Trade Representative told AFP.

China said the investigation into US auto imports found domestic vehicle manufacturers had "suffered substantial damages" due to the dumping and subsidies.

The anti-dumping penalties range from 2.0 percent to 21.5 percent while the anti-subsidy tariffs will be set at a maximum 12.9 percent, the ministry said.

State media said previously that the total number of vehicles affected by the tariffs would not exceed 50,000 units a year -- a small fraction of the total number of vehicles sold in China.

China overtook the US 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 US last week asked the World Trade Organisation to settle a dispute with China over Beijing's anti-dumping duties and countervailing duties on US chicken imports.

A US trade panel also voted this month to continue an investigation into Chinese solar panel makers, drawing an angry response from Beijing and state media which accused the United States of "protectionist attitudes".

The decision allows the US Commerce Department to continue its probe into complaints by US solar firms -- led by SolarWorld Industries America -- that China was dumping solar cells and panels in the US market at prices below the cost of production.

The Commerce Department investigation, which could lead to retaliatory duties on Chinese imports, sparked tit-for-tat action from China, with Beijing announcing last month a probe into US subsidies for renewable energy companies.

US lawmakers have also ramped up pressure on Beijing over the value of its currency, a constant thorn in the side of US-China ties.

President Barack Obama said last month Beijing has not done enough to allow the unit to reach a fair market level and called on a now "grown up" China to act more responsibly -- sparking a furious response from Chinese media.