China: Tariff Will Hurt U.S. Relations

Beijing Says Trade Penalties on Chinese Tire Imports Imposed by Obama Violate Global Rules

(AP)  President Barack Obama's decision to impose trade penalties on Chinese tires has infuriated Beijing at a time when the United States badly needs Chinese help on climate change, nuclear standoffs with Iran and North Korea and the global economy.

China condemned the White House's announcement late Friday as protectionist and said it violated global trade rules. At home, the punitive tariffs on all car and light truck tires coming into the U.S. from China may placate union supporters who are important to the president's health care push.

To the White House, it was "simply about enforcing the rules of the road and creating a trade system that is based on those rules and is fair for everyone," spokesman Robert Gibbs told reporters traveling with Mr. Obama on Saturday to a health care event in Minneapolis.

Chen Deming, China's minister of commerce, said the penalties would hurt relations with the U.S. A ministry statement said President Obama had "compromised to the political pressure of the U.S. domestic trade protectionism."

"The Chinese government will continue to uphold the legitimate interests of China's domestic industry and has the right to take corresponding measures," Deming said.

President Obama had until this coming Thursday to accept, reject or modify a U.S. International Trade Commission ruling that a rising tide of Chinese tires into the U.S. hurts American producers. The United Steelworkers blames the increase for the loss of thousands of American jobs.

The federal trade panel recommended a 55 percent tariff in the first year, 45 percent in the second year and 35 percent in the third year. Obama settled on 35 percent the first year, 30 percent in the second and 25 percent in the third, Gibbs said

"For trade to work for everybody, it has to be based on fairness and rules. We're simply enforcing those rules and would expect the Chinese to understand those rules," Gibbs said.

The decision comes as U.S. officials are working with the Chinese and other nations to plan an economic summit in Pittsburgh on Sept. 24-25 of the 20 leading rich and developing nations. China will be a major presence at the meeting, and the United States will be eager to show it supports free trade.

Many of the nearly two dozen world leaders President Obama is hosting have made strong statements critical of countries that protect their key industries. Mr. Obama, too, has spoken out strongly against protectionism, and other countries will view his decision on tires as a test of that stance.

Governments around the world have suggested the U.S. talks tough against protectionism only when its own industries are not threatened. U.S. rhetoric on free trade also has been questioned because of a "Buy American" provision in the U.S. stimulus package.

The tire decision could have ramifications on issues such as the nuclear disputes with Iran and North Korea and on efforts to address climate change. China is the world's third-largest economy and a veto-holding member of the U.N. Security Council.

Roy Littlefield, executive vice president of the Tire Industry Association, which opposes the tariff, said it would not save American jobs. He said the penalties would cause tire manufacturers to move production to another country with less strict environmental and safety controls, less active unions and lower costs than the United States.

The steelworkers union brought the original case in April, accusing China of making a recent push to unload more tires ahead of Mr. Obama's expected action. The union says more than 5,000 tire workers have lost jobs since 2004, as Chinese tire overwhelmed the U.S. market.

The U.S. trade representative's office said four tire plants closed in 2006 and 2007 and three more are closing this year. During that time, just one new plant opened. U.S. imports of Chinese tires more than tripled from 2004 to 2008 and China's market share in the U.S. went from 4.7 percent of tires purchased in 2004 to 16.7 percent in 2008, the office said.

In a two-page statement China said the tariffs do not square with the facts.

There hasn't been an obvious increase of exports of tires to the U.S., the statement said, citing a 2.2 percent increase in 2008 from 2007, and a 16 percent fall in exports in the first half of 2009 compared with first half of 2008.

The new tariffs, on top of an existing 4 percent tariff on all tire imports, take effect Sept. 26.

For the Chinese government, the tire dispute threatens an economic relationship crucial to China's economic growth. There was speculation before the decision that new tariffs could produce public pressure on Beijing to retaliate, potentially leading to a trade war.

[pw08-2009]

It's funny how we allow ourselves to be China's little beotch. Everytime we make moves to "even the playing field" they retaliate. Everytime they decide to screw us, we just take it. Now, because we are so dependant on China, they'll just hurt us even more.

[anti-global2]

This is an example of why so called free trade and globalization is not good for the U.S. economy.
I don't think anyone will deny China taxes U.S. made goods, and all foreign made goods for that matter very heavily to protect their domestic industry. When the U.S., a nation even in bad economic times whose citizens have more disposable income then most other countries, tries to do the same thing China and the world screams bloody murder.
Then they go in front of the WTO and complain about how many poor they have and how even though their economy is growing they still have a long way to go before they can improve the lives of most of their people. Then they claim unfettered access to the U.S. market is a key to their growth like it is some kind of right they have.
This leads to a few questions. 1. Why should we in the U.S. sacrifice or care about the quality of living in China? 2. Why would we do anything to help an enemy? 3. Why should the U.S. compete in a global economy where the rest of the world wants us to tie one arm behind or back so they can eventually catch up to us? 4. Why would we want anyone to catch up to us? 5. Since when does the U.S govt' have any obligation to help and serve the interests of anyone other then U.S. citizens?

[PsyOpsCmd]

Why would anyone buy Chinese tires.....they are crap like the rest of their sh**. Any American caught buying Chinese tires should have their health insurance canceled and put under Obama's public option plan...

[bubbadubba]

See how the communist Republicans come to the defense of their leader communist China?
Nuff said.

[PsyOpsCmd]

Let see what Republican speaks out first against this and then we need to see if he/she received money from the commie ***tards... Always look for the money connection.

[element51]

jimmyc.....Your post does hold water. However your cup is full of holes. Are you really content to just sit still and let the Chinese beat the crap out of us. I would rather suffer the consequences of whatever might happen than to kowtow to them and let them walk all over us. And you seem to think that we are a penniless backwoods little country when in reality we are still one of the strongest economies on the planet. I do not believe that the Chinese would be foolish enough to try to destroy us. They know that they would be bloodied as well. And your fear of passing a health care bill is baseless. If we do nothing health care and insurance costs are going to continue to spiral upward at a rate that will take your breath away. So why not spend the money to get control and see that all our citizens have health coverage. Health care and insurance costs have trippled in the last three years. If we do nothing they will tripple again, and again, and again in the next 10 years. I strongly suspect that those cost increases will total much more than we will need to spend to get health care now. But believe what you will. I try to avoid Limbaugh and Beck so I spend time digging for facts...not lies and half truths. I don't always like what I find but at least I know that I'm operating from truth and not partisan lies.

[element51]

Just being a normal run of the mill American with an American education I don't profess to have the answers to any of the problems we face today. But I do know what I have seen. I'm old enough to have lived in two eras....pre Reagan and post Reagan. And I know for a fact, I was here, that things began to change post Reagan. I saw the repeal of almost every regulation on the books and I watched as big business slowly took control of our lives. Some of you people continully scream that Obama is to blame for EVERYTHING that is wrong and one has to wonder how he managed this mess in just eight short months. You listen to that gasbag Limbaugh or that moron Beck and you actually believe that they are experts on all this stuff. I have a masters degree and Limbaugh didn't even complete one year of college. I don't claim to be an expert so just what is it that qualifies him to lead you? Is it because he is saying what you want to hear? I don't know what Beck's educational background is but I doubt that he is overqualified. All you have to do is listen to the things he says and you get an idea of where his head is. So, that being said, let's return to the subject of this article. The thing I find most interesting is that if Obama gets tough with the Chinese you criticize him and if he doesn't get tough with the Chinese you criticize him. What the hell is it you want? I know that for eight years Bush kissed their azzes so he could borrow money to fund his tax cuts and his wars. And now, because of that, they have us at quite a disadvantage. And our greedy multinational corporations have continued to ship our decent jobs overseas so fast that they were gone before we realized what was happening. And the crap that the Chinese ship over here is so shoddy that it appears that they don't know what "quality control" means. When you take a guy away from an 18.00 per hour job and there is nothing left for him but a minimum wage job with no where to go it's no wonder that people are losing their homes and filing bankruptcy in droves. But you uneducated redneck trailer trash bible thumpers keep right on mouthing what your "expert" leaders keep spewing out. Go ahead and destroy Obama and to hell with the country. That doesn't seem to matter to you as long as you can destroy Obama and get those republicans back in power. I feel sorry for the whole sorry lot of you and thanks a lot for dragging me down with you. And since you seem so fond of all things Chinese....Be careful what you wish for..you may get it.

[kevjustice]

I suggest a boycott on chinese checkers.

[jimmyc1955]

One last comment - you guys are sooooo fixated by Bush that Obama is playing you like a fiddle. Every time he ticks off the base by saying things like he won't close Gitmo (still open) or won't bring the troops home (sending more to Afghanistan) or no public option (how many times has he said that now?) and the base liberals go all goofy he gets Eric Holder to talk about Cheney or Bush or the CIA and you guys all drool like dogs trained by Pavlov.

You forget he is lying to you - deliberately. He lied to you, he lied to us - why oh why would you believe him now? The LA Times did a report on the secret white house meetings by the heads of the health insurance and medical fields - but the White house won't even talk about it.

Oh but then he was going to be the most transparent presidency that won't hire lobbyists and have the highest of integrity (except for those nasty problems with taxes)in history. Would that be another lie?

Oh and by the way - if it is sooo critical to pass health care reform now - why doesn't it go into effect till after the next presidential election????

[bubbadubba]

Listen to the Republicans.
They want Americans to suffer and die with no health care and now they want more Americans to be put out of work and factories closed in the US by China dumping tires below cost because they are subsidized by the Chinese government.
I told you people that Republicans are communists, and this is just more proof they are loyal to the communist party especially China the world leading communist government.
Anything what weakens or destroys our government and country, the Republicans are for and anything that helps save our country the Republicans are against.
Watch out, the Republicans have an agenda and it started with daddy Bush.
The agenda is to make the US weak so China can rule the world and the Republicans can openly take their place in the communist party.

[jimmyc1955]

Ohhhh - this is very very rich - got to love it.

We don't want health care - hmmm. No - thats not true. I don't want to pay a ludicrious amount of money for health care plans that package a lot of things I don't want for coverage. Look at Massachusetts and their "mandated" health plans. All over the top packages - all expensive.

Second - we can't afford this. You seem to be operating in a vacuum. Our budget is already $1.4 Trillion behind (I don't give a rats ass why so don't waste my time with the Bush/Obama/Reagen/Clinton crap - its a red herring) and falling farther all the time. Health care is projected to INCREASE costs by $1.7 TRILLION as stated by the Democratically controlled GAO.

China owns trillions of dollars of US debt. IF they decide to dump that debt our dollar will be worthless - your paycheck will be fundimentally worthless. Inflation will skyrocket. This isn't about china and "free trade" but it's about not ticking off the guy who you owe around 9 trillion to - unless you want him to ask you to pay up now.

You see this as republican vs. democrat. It isn't. It is about out of control spending for over 10 years now that we can't afford.

Please - ask yourself something. If you have only enough money to pay the mortgage to keep your house or to buy a new 52 high def LED TV - would you buy the TV so you can watch your house get foreclosed on?? That is about where we are.

[pepperwood2]

China: Tariff Will Hurt U.S. Relations ...... Beijing Says Trade Penalties on Chinese Tire Imports Imposed by Obama Violate Global Rules.

As was observed this Tariff will be passed on to the American People. It is simply an attempt by Obama to appease the UAW to try to get them to go along with his Health Care Proposal. Pay Offs if you will! In the meantime we the people have to search about in order to buy what we can afford. Be it American, Chinese, Indian, Mexican, Russian etc.

When we do Our Government plays politics, imposes tariffs, fees, taxes on affordable foreign goods, imports, etc. Say what you will but there are many American Businesses that make a pretty good living by contracting, importing & reselling of Chinese Products. The Chinese are very good entrepreneurs they can sell a decent product at an affordable price to the masses of many countries. They are fiscally responsible and managed to have money in the bank to loan to their Bankrupt Capitalistic Friends. So Sad that our government has gotten us into this predicament and have to resort to violate global trade rules on our Friends for their personal agenda.

[erasmus111]

"Beijing Says Trade Penalties on Chinese Tire Imports Imposed by Obama Violate Global Rules"


Global rules....hmmmm, since when does China worry about rules?


Surely there must be rules against poisoning and torturing people and animals?

[ffoulkes-2009]

How about we drop all tariffs against them, and they drop all tariffs against us...We'll just see who comes out on top of that one.

[cusefan211c]

And further more the junk China is sending to us is just that cheap made junk and so much has been recalled i don;t want it here filling up my landfills

[cusefan211c]

Well we as americans finally need to stand up push AMERICAN made products back into the global market and start squeezing out the crap we are bringing into this country that has destroyed our lifestyles and jobs because of cheap labor and corporate greed. It's time for the Obama administration to tax the crap or fine the heck out of all these AMERICAN based companies doing business outside of america. I shoulsn;t have to speak to a phillipino or and indian when i need DELL tech support or should i be called constantly by and indian or pino outsourced by GE MONEY for credit i need to pay i should be talking to an american to work out my problems and it ticks me off as an american how my personal info (IE SSN) is now in the hands of another country. Sad part of it all is under the PRIVACY ACT of 1974 they shouldn't have my info

[rightbehind]

Oh well!

[pubsrtoast]

From Paul Roberts.

In the U.S. the myth has been firmly established that the jobs that the U.S. is outsourcing offshore are being replaced with better jobs. There is no sign of these jobs in the payroll jobs data or in the occupational employment statistics. When a country loses entry level jobs, it has no one to promote to senior level jobs. When manufacturing leaves, so does engineering, design, research and development, and innovation itself.

On February 16, 2006, the New York Times reported on a new study presented to the National Academies that concludes that outsourcing is climbing the skills ladder. A survey of 200 multinational corporations representing 15 industries in the U.S. and Europe found that 38 percent planned to change substantially the worldwide distribution of their research and development work, sending it to India and China. According to the New York Times, "More companies in the survey said they planned to decrease research and development employment in the United States and Europe than planned to increase employment."

The study and the discussion it provoked came to untenable remedies. Many believe that a primary reason for the shift of R&D to India and China is the erosion of scientific prowess in the U.S. due to lack of math and science proficiency of American students and their reluctance to pursue careers in science and engineering. This belief begs the question why students would chase after careers that are being outsourced abroad.

The main author of the study, Georgia Tech professor Marie Thursby, believes that American science and engineering depend on having "an environment that fosters the development of a high-quality work force and productive collaboration between corporations and universities." The Dean of Engineering at the University of California, Berkeley, thinks the answer is to recruit the top people in China and India and bring them to Berkeley. No one seems to understand that research, development, design, and innovation take place in countries where things are made. The loss of manufacturing means ultimately the loss of engineering and science. The newest plants embody the latest technology. If these plants are abroad, that is where the cutting edge resides.

The denial of jobs reality has become an art form for economists, libertarians, the Bush regime, and journalists. Except for Lou Dobbs, no accurate reporting is available in the "mainstream media."

Economists have failed to examine the incompatibility of offshoring with free trade. Economists are so accustomed to shouting down protectionists that they dismiss any complaint about globalization?s impact on domestic jobs as the ignorant voice of a protectionist seeking to preserve the buggy whip industry. Matthew J. Slaughter, a Dartmouth economics professor rewarded for his service to offshoring with appointment to President Bush?s Council of Economic Advisers, suffered no harm to his reputation when he wrote: "For every one job that U.S. multinationals created abroad in their foreign affiliates, they created nearly two U.S. jobs in their parent operations." In other words, Slaughter claims that offshoring is creating more American jobs than foreign ones.

How did Slaughter arrive at this conclusion? Not by consulting the BLS payroll jobs data or the BLS Occupational Employment Statistics. Instead, Slaughter measured the growth of U.S. multinational employment and failed to take into account the two reasons for the increase in multinational employment: (1) Multinationals acquired many existing smaller firms, thus raising multinational employment but not overall employment, and (2) many U.S. firms established foreign operations for the first time and thereby became multinationals, thus adding their existing employment to Slaughter?s number for multinational employment.

ABC News? John Stossel, a libertarian hero, recently made a similar error. In debunking Lou Dobbs? concern with U.S. jobs lost to offshore outsourcing, Stossel invoked the California-based company, Collabnet. He quotes the CEO?s claim that outsourcing saves his company money and lets him hire more Americans. Turning to Collabnet?s web page, it is very interesting to see the employment opportunities that the company posts for the United States and for India.

In India, Collabnet has openings (at time of writing) for eight engineers, a sales engineer, a technical writer and a telemarketing representative. In the U.S. Collabnet has openings for one engineer, a receptionist/office assistant, and positions in marketing, sales, services and operations. Collabnet is a perfect example of what Lou Dobbs and I report: the engineering and design jobs move abroad, and Americans are employed to sell and market the foreign-made products.

Other forms of deception are widely practiced.

[mnguyen4]

This is a very good article! I totally agree that there is no point of encouraging young people to go into math and science careers when only the unemployment line and hopelessness are awaiting them upon graduation. This happens to me.

The truth is that employers don?t want to hire the best and the brightest employees. Instead, employers are scouring world for the dumbest employees who are ready to toil years after years without complaints, in other words a slave labor workforce.

[RetiredandBored]

We have enough cheap, dangerous Chinese-made products in this country. It is about time we imposed tariffs in order to protect manufacturing jobs in this country.

[woeisme1]

China makes JUNK! Period. Most of it is made by abused labor - underage labor and most of what we get we have to recall anyway because it's deemed unhealthy for Americans.

[dkhorse11]

100% tax on all profits due to outsourcing, make your shareholders lose money due to the fact a company has outsourced labor.

A next to nothing tax on domestic manufacturing/job creation and an increased shareholder profit as a result.

You create a domestic consumer able to purchase your goods which in turn increases economic activity.

Jobs moved overseas means less buying power for the biggest consumer market on Earth.

Americans are the biggest consumers in the world, if they can't buy, everyone loses.

[mav547166]

So much for some help with North Korea.

[dkhorse11]

Tax to death American companies outsourcing business in China or other countries, NO TARIFFS! Then China has no complaint, it's all internal in the US! Business kept in America!

Make it cost equivalent to make goods in America (tax breaks) for manufactures then to outsource too China or others!