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China May Cancel U.S. Auto Deal : Trade: It says the imports may hinge on resolution of trade and other disputes with the United States.

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From Associated Press

China is hinting that a $130-million deal with the Big Three auto makers could be jeopardized if there is no resolution of trade and other disputes with the United States.

The English-language China Daily reported Sunday that Chinese trade officials were “uncertain” about the future of the deal to import cars from General Motors Corp., Chrysler Corp. and Ford Motor Co. because of the “recent tensions in U.S.-China relations.”

The U.S. companies agreed in July to export vehicles to China, which is eager for American technology to make auto parts and specialized vehicles. China already has a joint venture with GM in the northeastern city of Shenyang and another with Chrysler in Beijing.

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The auto makers said Sunday that they were unaware of potential problems with the export deal and were proceeding as planned.

Ford spokeswoman Lin Cummins said China had ordered 3,010 Ford Tempos, and the first cars are to begin rolling off the assembly line in Kansas City this week. The first shipments are scheduled for December.

GM spokesman Ronald Theis said his company is proceeding with its deal.

“I know of nothing that has changed that,” he said. A Chrysler spokeswoman did not immediately return a telephone call seeking comment.

Relations between China and the United States have soured because of Washington’s decision to sell fighter jets to China’s rival government in Taiwan and squabbling over U.S. demands for greater access to China’s market.

Last month, the United States threatened to slap punitive tariffs of up to $3.9 billion on Chinese products if the two sides failed to resolve their differences over market access by Oct. 10.

China countered by saying it would consider retaliatory tariffs of up to $4 billion on U.S. goods ranging from computers to cars.

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China also has threatened to halt imports of U.S. wheat if Washington goes through with the sale of 150 F-16 fighters to Taiwan.

Last year, China’s exports to the United States totaled $19 billion, while its imports of U.S. goods came to $6.2 billion.

High-level negotiations on the trade dispute are to resume in Washington on Oct. 6.

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