White House Slaps Tariffs On Chinese Paper

(AP)  The Bush administration, facing increasing anger over soaring trade deficits, announced Friday it would impose sanctions against Chinese paper imports, opening up a new avenue for beleaguered American manufacturers to seek government protection.

The action, announced by Commerce Secretary Carlos Gutierrez, reverses 23 years of U.S. trade policy by treating China, which is classified as a nonmarket economy, in the same way other U.S. trading partners are treated in disputes involving government subsidies.

The decision involved a case brought by NewPage Corp., a Dayton, Ohio-based paper company. It contended that its coated paper, used in printing glossy catalogues and annual reports, was facing unfair competition from imports from Chinese companies receiving improper subsidies from the Chinese government.

Commerce imposed penalty tariffs ranging from 10.9 percent to 20.4 percent on imports of glossy paper from China. The tariffs will take effect next week on a preliminary basis and will become final after a further Commerce review is completed in June.

The action was being closely watched by many other American companies, from steel to furniture, that were battered in recent years as Chinese imports flooded into the country.

U.S. companies have always been allowed to file antidumping cases, seeking penalty tariffs on the grounds that the Chinese products were being sold in the United States below cost.

But with Friday's action, they will also be able to seek penalty tariffs, known as countervailing duties, on the basis of improper government subsidies — everything from favorable loans from state-owned Chinese banks to direct government support.

"The United States today is demonstrating its continued commitment to leveling the playing field for American manufacturers, workers and farmers," Gutierrez said in announcing the decision.

The Chinese government criticized the administration decision.

"This action of the U.S. side goes against the consensus reached by the leaders of both countries to resolve disputes through dialogue," said Wang Zinpei, a spokesman for China's Ministry of Commerce, quoted by the Xinhua News Agency. "China strongly requires the U.S. side to reconsider the decision and make prompt changes."

Daniel Porter, a Washington attorney representing the Chinese government, said no decision had been made yet on whether to appeal a federal court ruling on Thursday that gave the Commerce Department the go-ahead to proceed with the sanctions.

The decision by Commerce represented the latest effort by the administration to adopt a tougher approach to Chinese trade practices as the administration faces growing pressure from Democrats, who now control both the House and Senate.

Earlier this year, the administration filed a case against China with the World Trade Organization alleging that China was violating WTO rules by giving its companies improper subsidies for production of steel, paper and other products.

U.S. lawmakers, businesses and unions praised the action in the NewPage case.

In a joint statement, Ways and Means Committee Chairman Charles Rangel, D-N.Y., and Rep. Sander Levin, D-Mich., called the sanctions a "long overdue change in policy." They said they intended to push forward with legislation that would explicitly change U.S. law to make sure the Commerce actions will withstand any court challenges.

Leo Gerard, president of the United Steel Workers union, said the Commerce action was welcome news for workers at 22 paper mills in 13 states who produce the glossy paper covered by the sanctions. Gerard's union represents 90 percent of the work force in the U.S. coated paper industry.

Gilbert Kaplan, a Washington attorney representing NewPage, said the Commerce action reflected the reality that China as a major power in the global economy "should not be exempt from the laws that ensure fair trade."

When the Bush administration made it known last year that it was willing to consider cases against China involving government subsidies, it was seen as an effort to bring more pressure to bear on the Chinese to adhere to the rules of the WTO, which China joined in 2001.

Treasury Secretary Henry Paulson is leading an effort to pressure China to let its currency rise in value against the dollar. American manufacturers contend that China is devaluing its currency by as much as 40 percent to give the country unfair trade advantages.

[Syndicate]

How do you compete against the chinese government. This not some poor mom and pop paper company in china. First they are virtually no environmental regulations. Second there are very few labor laws. Third they have the finacial resources of China. How can they make something in china and ship it to us for less than we can make it for? The truth is we have been setting china up for a long time. Now that she has tasted power and wealth and invested heavely in new brands we can threaten to pull their plug on the worlds most lucrative economy. Ours. Obviously China would be very upset if we denied them access to our Markets. Since we have a trade imbalance it would hurt them more than us if it turned into a trade war. They are also limited in reltaliating against American corporations since this is their primary source of high technology and investment capital. We have china right were we want her and were not using any lube.

[yorkark]

What is really bad about this whole China thing is that most of the stuff they are selling us at give away prices is things and methods they stole from our manufacturers to begin with.

We need to stop what is going on in this country, this wholesale give away of this country and it goods is criminal and someone needs to be in Jail. Maybe we need to start with the people that Signed NAFTA. I for the most part I like President Clinton, but he did this country a great diservice when he signed into law NAFTA, which was the beginning of the end of all this crazy trade policy we now have.

[harp1963]

You gotta be kidding me. Bush signs a free trade bill allowing China to destroy just about all of our good paying industrial jobs and now his boys are going to bat for the paper industry? Something smells here. There must be some rich guy who golfs with George's Dad that has a lot of stock in the paper industry. This countries future generations are going to wish we would have left China in the 1950's instead of taking our manufacturing base over there and showing them the way to our world. The Chinese power/greed people will eventually turn on us. They have no regard towards their own people let alone Americans. George Jr. will be regarded by historians 100 years from now as possibly the most corrupt idiot ever to sit in the White House.

[yorkark]

Big deal, just how much paper to we use from China, other then the currency we keep borrowing.

We need to put a tarrif on everything we get from China so we can pay off the loans and get out fun under this monster.

[michellem99-2009]

I feel Bush needs classes in manners as he is rude. It makes you wonder why Americans are so hated. China makes most of the goods we all use every day. It makes no sense to firefight with them. China is the oldest nation in the world. China and paper. The only reason we off-shore jobs to save money as they are paid less. We have lost our American pride of "made in USA". As the saying goes 'What comes aground goes aground' and America is feeling that hate. I for one did not ask for.We live in a nation of greed and war-staters. I for one feel that its over oil. This is my say.

[omega39-2009]

If China can offer paper to the US at an equal quality level and a lesser price than American sellers, then, I say, US sellers, get inventive, take the next step, become competitive, offer a better product and make the US want to buy from you...

Nice speech but if China is manipulating their currency and paying their workers $2 a day there is no way for the US producer to realistically compete other then to move his operation to China.

[me4prezz]

Hey, Good one Bush! Not only are we getting closer and closer to war with Iran, on top of that with Iraq and Afghanistan, but we are going to start picking fights with China. I mean, really, I can see how we have the unlimited means necessary to go to war against the rest of the world (did someone tell Bush that China had an undiscovered oil field or something??...), especially considering that if we attack Iran, China will fight for the Iranians against us, but by all means, lets start making them angry ahead of time by putting tariffs and restrictions on their imports while moving half of our businesses into China so that they can make money. This makes so much sense. Really. Hmmm....does the government actually think or do they just draw stuff out of a hat on a daily basis to see who to **** off today? (P.S. You have to read this post with the extreme sarcasm with which it was written...)

[danimal50]

Tariffs are good for businesses and bad for consumers. Simple as that.
Back in the 60s the automotive industry screamed for tariffs because the Japanese were trying to cut into "their" market.
Had it not been for Toyota and Honda and Subaru and Datsun, we would still have over chromed, under engineered, unsafe gas guzzlers with little or no quality involved.
The Japanese made the US big three get competitive and offer a product that was worthy of being bought.
Now US paper is screaming and the stupid government is slapping tariffs onto perfectly good, lower priced paper.
Do you really want to pay more for the paper you buy? OK, if you do, then fine, but me, I want the best paper at the best price and if that means buying Chinese paper, well, then, sorry US paper people, get more competitive.
This is a world market, not a US franchise.
You either find a way to get more competitive and offer a product at a price people are willing to pay, or you get on down the road. What gives you the right to make me pay more for the paper I buy?
If China can offer paper to the US at an equal quality level and a lesser price than American sellers, then, I say, US sellers, get inventive, take the next step, become competitive, offer a better product and make the US want to buy from you.
Don't make me pay more for paper by having your bought and paid for Senator or Representative slap tariffs on imported products that will result in my cost of the product increasing.

[grazinggoat]

-Beautiful act of Patriotism Walking-Liar. Real dilemma for China. We want them to increase, improve their man-power conditions, yet we want to pay cheap manpower and labor, and we seek to move our operations to China. What the heck? How to understand this. We did the same with Canada, by imposing a tariff on wood.

-Hasn't China signed an international agreement on labor compensation and conditions?

-Walking-Liar can you enlighten our dark brains on that issue...?

- Speaking of subsidies, How come Haliburton has not been slapped out of Iraq? Isn't it getting the tax-paid money by the buckets. Or maybe DicckCheney is not Chinese.

[j-whitman]

Paper Tariff ???? -- Not surprising coming from Bush,, Who ran from active duty & only suffered paper cuts.