China Government ‘Strongly Opposes’ U.S. Tire Tariff Imposition

Discussion in 'Wall St. News' started by ASusilovic, Sep 12, 2009.

  1. Sept. 12 (Bloomberg) -- China “strongly opposes” U.S. President Barack Obama’s decision to impose tariffs on tire imports from China and may refer the case to the World Trade Organization, the Asian country’s Ministry of Commerce said.

    The U.S. violated rules of the WTO and the tariff imposition is a breach of the commitments made by the U.S. at the Group of 20 summits, the ministry said in a statement posted on its Web site, citing spokesman Yao Jian. The move will harm both countries’ interests and produce a chain reaction of trade protectionism, slowing world economic recovery, it added.

    The U.S. government placed tariffs starting at 35 percent on tire imports from China, backing a United Steelworkers union complaint against the second-largest U.S. trading partner, according to a White House statement yesterday. The case brought by the United Steelworkers is the largest so-called safeguard petition filed to protect U.S. producers from increasing imports from China.

    “It is an abuse of the trade remedy measures and made an extremely bad start against the backdrop of global financial crisis,” China’s statement said. China will reserve “all legitimate rights, including referring the case to the WTO.”

    The decision is a blow to Chinese producers such as GITI Tire Pte Ltd., the largest Chinese tire maker, and U.S. retailers of low-cost imports.

    Tire Production

    “By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio, executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.”

    That may be a warning to the Chinese. There is more to come. Protectionism newly invented.
  2. Lethn


    Wait a minute.... World trade organization? When the hell did we have one of those? And don't these morons know that tons of us rely on Chinese imports every day especially when it comes to electronics? Way to slaughter your own economy America.
  3. Maybe that's the reasoning behind this : American people will actually start to work again and not "rely" anymore on Chinese imports ? My2cents....
  4. Lethn


    I can understand the logic, since that's the kind of thing the British also actually did when WW2 started. They didn't impose any tariffs though, I wouldn't give Obama that much credit to his intelligence for that very reasoning.

    Most of America's foreign policy seems to revolve a lot around isolationism even though they say otherwise. Which is a shame really because that's not what the consitution tells them to do.
  5. I am not sure how "This decision will cost many more American jobs than it will create", when we export little and import everything. Exporters do not have a interest in starting a major trade war. Obama has been vague on trade, sure he is more protectionist than Clinton / Bush, but that wouldn't take much.
  6. Its' all political.......

    The White House leaked word late Friday evening that the U.S. will impose a 35% tariff on imported Chinese tires used by millions of low-income Americans. We wonder if President Obama understands the political forces he's unleashing with this blatant protectionism.

    Mr. Obama is setting a precedent in the tire case because he is applying a previously unused part of the trade law known as Section 421. This allows U.S. industries or unions to seek protection from "surges" of Chinese imports, with a lower burden of proof than normal antidumping or countervailing duty cases. President Bush nixed the four Section 421 petitions that reached his desk, citing the national economic interest. Domestic lobbies had lobbied Mr. Obama hard to reverse that pattern and set a new protectionist precedent.

    Eleven Senators, including Sherrod Brown (D., Ohio) and Debbie Stabenow (D., Mich.), sent a letter to President Obama in July advocating the tariff on Chinese tires. "We firmly believe that providing this specific measure of relief would send a powerful message to the American people that you intend to keep your promise to enforce trade laws fully," they wrote.

    Then there are companies that face competition from lower-cost Chinese imports and want to push their antitrade agenda forward. Take the Committee to Support U.S. Trade Laws, which lobbed a pro-tariff letter into the White House this month. The umbrella group includes the American Furniture Manufacturers Committee for Legal Trade; the California Fresh Garlic Producers Association; the U.S. Beekeepers; the Florida Fruit & Vegetable Association; and the Flower Growers of Puget Sound. "This case is being watched closely to see whether Section 421 is an effective law or a dead issue,"committee executive director David A. Hartquist wrote to Mr. Obama.

    This threat will now be realized as other industries pursue the 421 solution to reducing competition. Some of the product categories that have seen import surges include shoes, lawn mowers, television monitors, hearing aids, musical instruments like keyboards and guitars, women's underwear, blouses and t-shirts, according to Greg Rushford, editor of a newsletter on trade policy. Oh, and trousers, women's knit shirts and bras, according to Cass Johnson, president of the National Council of Textile Organizations—another lobby that must be gleeful that Mr. Obama has unleashed Section 421.

    As a candidate, Mr. Obama courted union support, and the United Steelworkers filed the tire case anticipating he would pay them back. Some in the business and policy communities thought Mr. Obama didn't really mean it, and that like Bill Clinton he would stand for the national economic interest in open trade once he became President. Mark that down as another misjudgment. In his first big trade test in the White House, Mr. Obama has allied himself with the protectionists, and the world will see his political surrender and rush to exploit it.
  7. Now what we need is a tax credit for low income people who used to buy these cheap Chinese imports but will now have to pay more for their American tires...

    oh oh.. but wait, low income people pay almost no taxes.....damn.....
  8. never mind they can get a check refund....:D

    This government and our capitalist system are a joke indeed.
  9. lol when will the world learn. Trade rules only apply to everybody else, not americans. In canada, we had a trade dispute with the us,it went to nafta. We won the dispute. But the united states refused to recognise the nafta ruling. Lesson learn, rules only apply to everybody, except the states :)

  10. The problem with this decision is that it only applies to tires. There should be massive tariffs on ALL imports from China.
    #10     Sep 12, 2009