China-U.S. Trade Dispute Key Issue at G-20
The real fireworks at the G-20 summit getting under way Friday in Pittsburgh will likely take place behind closed doors when the U.S. and China try to defuse a trade dispute before it gets ugly - as CBS News business correspondent Anthony Mason reports.
When President Obama slapped a 35 percent import tax on Chinese tires this month, some warned it was the opening shot in a trade war.
"I think it's very clear that China cheats," said Leo Gerard, president of the United Steelworkers union.
The united steelworkers filed the complaint accusing China of illegally flooding the U.S. market with cheap tires. On its Pittsburgh headquarters, the union is sending a nine-story-high message to world leaders that it's fighting to protect American jobs. (The banner reads, "Jobs, Good jobs, Green jobs.")
"If we think other governments aren't following the rules they agreed to, then we certainly will try to bring cases that prove our case," Gerard said.
But the Chinese are not amused:
"They should work hard to reduce price of their products, rather than to complain," said Yan Xuetong of Tsinghua University.
President Hu Jintao complained about the tariff when he met with Mr. Obama in New York Tuesday. At stake are relations between the world's biggest economy and its fastest growing economy.
"Both sides are very cognizant of the fact that they're playing with fire politically," said David Gordon of the consulting firm Eurasia Group.
The Chinese now ship more than $300 billion in goods to the U.S. every year - nearly five times what we export to them.
The garlic industry, for example, has been buried by cheaper Chinese imports.
"The Chinese actually import nearly half of the garlic that's eaten and consumed in the U.S. now, whereas in 1992 it was only one or two percent," said Bill Christopher of garlic-grower Christopher Ranch.
The Chinese are also our biggest foreign lender, holding $800 billion in U.S. debt. In other words, the Chinese and U.S. economies are crucial to each other.
"Critical to each other," Gordon said. "And that's not going to change. They continue to be the driving force in the world economy. But the relationship is shifting."
G-20 leaders want to keep that shift from becoming an earthquake that could send shockwaves through the global economy.
