Obama slaps tariff on Chinese tires

[mawilson 2,133]

US penalizes Chinese tires, infuriating Beijing

WASHINGTON — President Barack Obama's decision to impose trade penalties on Chinese tires has

infuriated Beijing at a time when the U.S. 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.

Chen Deming, China's minister of commerce, said the penalties would hurt relations with the U.S.

A ministry statement said 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.

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, White House press secretary Robert Gibbs said.

"The president decided to remedy the clear disruption to the U.S. tire industry based on the facts

and the law in this case," 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 Obama is hosting have made strong statements critical

of countries that protect their key industries. 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 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.

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[one...two...tree 2,762]

Looking out for American steel workers.

[Mags 112]

Aren't Chinese tyres the ones that were exploding a while back?

[one...two...tree 2,762]

Aren't Chinese tyres the ones that were exploding a while back?

Yep.

[Ban Hammer 13,398]

i sure hope hillary can do something about this once she takes office.

[natty bumppo 297]

so now obama is attacking rubber(s)

[PlatyPius 5]

Wish he'd do the same to Chinese bikes.

(Actually, I wish it applied to ALL Chinese products.)

[Ban Hammer 13,398]

Wish he'd do the same to Chinese bikes.

(Actually, I wish it applied to ALL Chinese products.)

i so dislike seeing made in china on everything to buy. i'd rather see made in the usa or canada.

[Pooky 3,807]

At a time when the USA is in debt to the Chinese to the tune of who knows how much, is this really a smart move?

Surely there is an alternative to a punitive trade tariff, like negotiation? The USA needs to be on speaking terms with China, so as not to unduly hinder its global political objectives, especially concerning Korea. This action smacks of short-term politics, when a longer view would probably be more appropriate.

[mawilson 2,133]

Wish he'd do the same to Chinese bikes.

(Actually, I wish it applied to ALL Chinese products.)

i so dislike seeing made in china on everything to buy. i'd rather see made in the usa or canada.

Double

I stopped buying Chinese products a long time ago.

Many (most?) people here don't understand that by buying stuff made in China, they are sowing

the seeds of their own destruction in exchange for a brief, superficial, ephemeral illusion of prosperity.

("Yay, I just bought something cool for a buck! See, the dollar really does go a long way!")

At a time when the USA is in debt to the Chinese to the tune of who knows how much, is this really a smart move?

Yes. We have a huge trade imbalance with China that needs to be corrected.

(Guess what? Trade imbalance = they need us more than we need them)

[Ban Hammer 13,398]

At a time when the USA is in debt to the Chinese to the tune of who knows how much, is this really a smart move?

Surely there is an alternative to a punitive trade tariff, like negotiation? The USA needs to be on speaking terms with China, so as not to unduly hinder its global political objectives, especially concerning Korea. This action smacks of short-term politics, when a longer view would probably be more appropriate.

i believe china needs us more than we need china. they have to have some place to dump their cheaply made #######.

[mawilson 2,133]

Surely there is an alternative to a punitive trade tariff, like negotiation? The USA needs to be on speaking terms with China, so as not to unduly hinder its global political objectives, especially concerning Korea. This action smacks of short-term politics, when a longer view would probably be more appropriate.

Let China and Japan worry about Korea.

[mawilson 2,133]

The only alternative to slapping tariffs on Chinese ####### is not buying their products.

Businesses will always try to cut costs by outsourcing manufacturing to countries where labor is cheaper.

We can't really stop them, unless we stop buying stuff "made in China".

[Pooky 3,807]

Surely there is an alternative to a punitive trade tariff, like negotiation? The USA needs to be on speaking terms with China, so as not to unduly hinder its global political objectives, especially concerning Korea. This action smacks of short-term politics, when a longer view would probably be more appropriate.

Let China and Japan worry about Korea.

A couple of problems there. China will only act if it itself is threatened, and the North Koreans aren't quite that dumb. And Japan is too busy worrying about an attack by Godzilla. Or rather, international treaties prevent them from a whole range of measures they might otherwise wish to take.

Last, but not least, North Korea is most likely to throw something at the USA. So, inaction on the part of the US is no solution.

[mawilson 2,133]

Last, but not least, North Korea is most likely to throw something at the USA. So, inaction on the part of the US is no solution.

Why would they? They would be annihilated if they did, and they know it.