Obama slaps duties on tire imports from China

[hskywalker]

WASHINGTON (*******) - U.S. President Barack Obama (http://www.*******.com/news/globalcoverage/barackobama) slapped steep additional duties on tire imports from China on Friday in a move that pleased domestic labor groups but drew a strong rebuke from Beijing.

http://www.*******.com/article/politicsNews/idUSTRE58B08G20090912?sp=true

[Alpheus]

Slow news day, eh?

[hskywalker]

Sept. 9 (Bloomberg) -- Candidate Barack Obama (http://search.bloomberg.com/search?q=Barack+Obama&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) pledged to stand up for workers by cracking down on imports from China. President Obama has promised (http://www.canadainternational.gc.ca/g8/summit-sommet/2009/declaration.aspx) to fight protectionism and trade barriers.
His administration must decide which path to take starting from today, in two of the biggest U.S. trade cases (http://www.usitc.gov/trade_remedy/) against China. U.S. Steel Corp. (http://militaryphotos.net/apps/quote?ticker=X%3AUS) and the United Steelworkers (http://www.usw.org/) union are behind a complaint on imported pipe. The union, an Obama political ally, is also pushing for curbs on Chinese auto tires.
“These are decisions that can’t be avoided, so they’ll be perceived as setting the tone for what the Obama administration trade policy is,” said Timothy Keeler, the former chief of staff for the U.S. Trade Representative’s office. Keeler, a lawyer at Mayer Brown LLP in Washington, represents GITI Tire Pte Ltd., (http://militaryphotos.net/apps/quote?ticker=600182%3ACH) the largest Chinese maker of tires, in the trade case.
The decisions may help shape the future of U.S.-China commercial relations. The two countries traded more than $400 billion last year, making China the second-largest U.S. trading partner after Canada. China is also the largest foreign holder of U.S. debt, with $776.4 billion.
The U.S. International Trade Commission (http://www.usitc.gov/), an independent body, has ruled against Chinese importers in both cases. Because the complaints were brought under different provisions of trade law, the Commerce Department has the final say over tariffs on the pipe, used in oil and gas drilling, and Obama will make the call on tires.
Commerce Ruling
In a ruling scheduled to be released today, the Commerce Department must decide whether to place duties on $2.8 billion in steel-pipe imports from China to compensate for subsidies that Chinese companies collect. The case was brought by the steelworkers; U.S. Steel, (http://militaryphotos.net/apps/quote?ticker=X%3AUS) the largest U.S.-based steelmaker; U.S. operations of Evraz Group SA (http://militaryphotos.net/apps/quote?ticker=EVGPF%3AUS), Russia’s second-largest steelmaker; and Pennsylvania-based Wheatland Tube Co.
The case is the largest so-called countervailing duty and dumping case filed (http://www.usitc.gov/trade_remedy/documents/case_stats_2008.pdf) against China, according to Daniel Porter (http://search.bloomberg.com/search?q=Daniel+Porter&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a lawyer for Winston & Strawn LLP (http://www.winston.com/index.cfm?contentID=24&itemid=15608) in Washington, which represents Chinese producers in the case.
Obama must decide by Sept. 17 on a petition by the steelworkers to cap or put tariffs on imports of $1.7 billion of tires from China. It is a test of whether Obama will make good on a campaign pledge to reverse course from President George W. Bush (http://search.bloomberg.com/search?q=George+W.%0ABush&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) and apply the so-called safeguard measures.
Bush turned down all four requests he got to impose duties or quotas on Chinese imports, saying the benefits of protection would be dwarfed by the costs. During the presidential campaign, Obama told (http://www.ncto.org/newsroom/pr20081029.pdf) the textile industry in a letter on Oct. 24, 2008, that he would “decide those cases on their merits.”
‘President’s Credibility’
“The one thing that is on the line here is the president’s credibility,” said Scott Paul, executive director of the Alliance for American Manufacturing (http://www.americanmanufacturing.org/), a coalition of steel companies such as Pittsburgh, Pennsylvania-based U.S. Steel and the steelworkers union. “If they want to pursue an activist trade agenda, they need to pursue an active enforcement agenda, and this is the first thing on their plate.”
On April 14, 2008, candidate Obama spoke to the United Steelworkers in Pittsburgh, a week before the contested Democratic primary in Pennsylvania.
“I have consistently supported in the Senate going after China,” Obama said then, after embracing union President Leo Gerard (http://search.bloomberg.com/search?q=Leo%0AGerard&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1). “Here’s the thing that people don’t understand: China needs our market. Their economy is dependent on exports to the United States. We have bargaining power.”
‘Problem With China’
Obama, referring to China’s purchase of U.S. Treasuries, added this caveat: “It’s pretty hard to argue with your banker,” he said. “That’s part of our problem with China.”
Since taking office, Obama joined other leaders at a meeting of the Group of Eight in Italy in July as they pledged to refrain from “taking decisions to increase tariffs above today’s levels.”
In June he warned, in an interview with the New York Times, about “sending any protectionist signals out there.”
China has made the same argument about the economic dangers of protectionism in the pending cases.
Liu Dan Yang, the deputy director general of China’s Ministry of Commerce, and nine other officials pressed the U.S. International Trade Commission at an April 22 meeting in Washington to turn down the tire and steel petitions.
‘Financial Stress’
“The Chinese delegation first stressed the importance during this time of global financial crisis for all governments to cooperate in sustaining free trade,” according to a memo that commissioners wrote on the meeting. They said the visiting officials were worried “other industries would identify Chinese imports as the source of their financial stress.”
Chen Rongkai (http://search.bloomberg.com/search?q=Chen+Rongkai&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a Beijing-based spokesman for the Ministry of Commerce, said today that a ruling against Chinese parties in either case may hurt the two nations’ trade ties.
“We hope the U.S. government will adhere to the promise it made at the G-20 summit on anti-protectionism and make a sound decision accordingly,” Chen said by phone. “Any ruling against the Chinese party, for instance in the tire case, would definitely hurt Sino-U.S. trade relations.”
Leaders from the Group of 20 (http://www.g20.org/) nations vowed after a summit in London in April “to do whatever is necessary to promote global trade and investment and reject protectionism,” restating a pledge made at a Nov. 15 gathering.
Shape the Results
The pipe and tire cases present the Obama administration with complications that could shape the results.
In the steel-pipe case, U.S. manufacturers saw their gross profits (http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/2009/octg/preliminary/PDF/OCTG%20Pub.pdf) almost triple to $2.42 billion in 2008 from the previous year, according to the International Trade Commission. Record oil prices drove demand for the product. While imports from China surged, U.S. production and employment increased too.
U.S. companies “were completely tapped out,” Porter, the lawyer for the Chinese producers, said in an interview yesterday. “They were producing all they could.”
Since then, as oil prices fell, demand in the U.S. has dropped off and Chinese imports have collapsed, according to Michelle Applebaum (http://search.bloomberg.com/search?q=Michelle+Applebaum&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), who runs a research firm in Highland Park, Illinois, that advises investors on the steel industry.
Chinese producers are curbing exports partly because any tariffs imposed by the Commerce Department would be retroactive, she said.
In the tire case, union workers don’t have support from U.S. manufacturers.
Opposes Tariffs
Cooper Tire & Rubber Co. (http://militaryphotos.net/apps/quote?ticker=CTB%3AUS) of Findlay, Ohio, the second- largest U.S. tiremaker, makes some of its tires in China and opposes tariffs. Goodyear Tire & Rubber Co. (http://militaryphotos.net/apps/quote?ticker=GT%3AUS) of Akron, Ohio, the largest U.S.-based producer, hasn’t taken a position.
GITI and importers of tires say the lack of support from the companies means American producers have abandoned the low- cost market to imports, so Obama should rule against the petition.
The U.S. and China may negotiate a “politically sensitive settlement” (http://www.chinaustradelawblog.com/2009/08/articles/trade-disputes/attack-on-china-rolls-on-new-tires-aaacaeaeceeaea/) to avert the International Trade Commission’s recommendation for duties of 55 percent on Chinese tire imports, said Elliot Feldman (http://search.bloomberg.com/search?q=Elliot+Feldman&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a partner with Baker Hostetler LLP in Washington, who doesn’t have a client in either trade case.
“The president understands the fundamentals of free trade,” Feldman, who writes a blog on China trade, said in an interview yesterday. The tire companies are shifting production abroad, “and saying that is like waving a red flag in front of a Democratic president.”
To contact the reporter on this story: Mark Drajem (http://search.bloomberg.com/search?q=Mark+Drajem&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) in Washington at mdrajem@bloomberg.net

http://www.bloomberg.com/apps/news?pid=20601103&sid=aRQkygH.3dTY

I don't quite understand how american politics works. Does this mean american steel makers and unions want tarriffs on chinese steel imports, but can't get it. So they push for tarriffs on chinese tires so they can start a trade war, even american tire manufacturers don't want the tarriff?

[hskywalker]

Slow news day, eh?
A bit old, still not posted though.

[Ordie]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aRQkygH.3dTY

I don't quite understand how american politics works. Does this mean american steel makers and unions want tarriffs on chinese steel imports, but can't get it. So they push for tarriffs on chinese tires so they can start a trade war, even american tire manufacturers don't want the tarriff?

All politics is local to keep the blue-collar voters placated. The tariff can be justified due to safety issues with Chinese made tires.

See: Chinese Tires Blamed for Fatal Van Accidenthttp://www.consumeraffairs.com/news04/2007/06/china_tires.html


I don't understand why China is alarmed. American entrepenuers always complain about the protectionist nature of the Chinese marketplace. Especially when state-owned businesses are involved.

[Wildgoose]

Wow, I didn't know Dollar Tree sold tires!

[wild_wild_wes]

Hey obama without the Chinese buying our debt, were in trouble, srsly.

The Ameteur strikes again....

[Zook]

It's quite remarkable to see the United States shake off the free-trade mantra which has dominated economic policy since Reagan to a policy of pragmatic protectionism. A shame it has come 20 years too late after Republican and Democratic Administrations have destroyed the industrial power of the United States which is now but a shadow of its former self much like Russia is today.

Finally someone in the white house is smart enough to stop drinking the Republican kool-aid and do the right thing by the workers.

[11 Bravo]

Finally someone in the white house is smart enough to stop drinking the Republican kool-aid and do the right thing by the workers.

You must be a communist with an axe to dull , comrade.

[Zook]

You must be a communist with an axe to dull , comrade.

Socialist actually, but I do not subscribe to Marxist-Leninism.

[Captain China]

You must be a communist with an axe to dull , comrade.
You know, this situation reminds me Chairman Mao once said, "Republicans are Chinese people's best friends." And, if you random pick up common people on street who could only rely on Chicom's propaganda machine to gain the knowledge about sino-us relationship, ask them which president is most friend to PRC, most of them will answer G.W. Bush.
Maybe G.W.Bush and GOP are secret Commies, who knowsp-)

[wild_wild_wes]

Socialist actually, but I do not subscribe to Marxist-Leninism.

Socialism destroys Liberty.

If you're okay with that, consider what that says about your character.

[Zook]

Socialism destroys Liberty.

If you're okay with that, consider what that says about your character.

Contrary to what you believe Socialism is not evil, in fact its practiced by every successful Democracy on the planet, including the United States, though the US sadly has been unable to provide something as wonderful as Universal Healthcare for its people it does provide many of the commons that Americans take for granted. It promotes liberty in these countries by improving the lives and power of the working and middle classes while working for a more just and equal society.

What destroys liberty and is evil is capitalism which is allowed to run rampant to where society serves capitalism and the elite few, and not capitalism serving society as a whole.

I am a firm believer in the market economy, but the market must have rules and regulations in order for the people and nation to benefit first and foremost.

[plato]

Socialism destroys Liberty.

If you're okay with that, consider what that says about your character.
Questions for you:

1. Is America a socialist country, now?
2. Was America a socialist country?
3. If NO to 1 and 2, then is America going to be a socialist country?
4. How many of our allies do you think are socialist countries? Can you name five or more?

[Gman992]

America is a post-industrial company. It produces doctors, lawyers, psychologists, teachers, etc---service industry. The only people who are crying for the good old days are union leaders who want to swell their rank and increase there power(and retirees). Remember the whole purpose of unions in the first place was to protect the workers from god-awful conditions. The only thing that I have to worry about at my office job is a paper cut. Hence the fact union leaders trying to get carpal tunnel syndrome ruled as a medical problem that can be covered. Remember you chose your work. People in this country can do anything they want. Some just chose to sit around and complain about everything without doing anything about it. Usually, these are the people who want someone else to take care of them--free health, etc. As the son of a retired steel worker, my dad worked his butt so that his sons and daughter could go to college and not work in such dangerous places with pay that is not even comparable to what a first year resident or even law clerks make. You know, I have three lawyer friends whom I can go to free legal advice--and I met them in college, and not some factory. Let's not forget the environment rules and regulations have also forced out many industries. In the long run, though this will mean higher prices for American made tires which in turn will lead to unemployment when retailers can't sell them for such high prices.

Nobody wants socialism in this country because those on the lower totem pole will not live an equally better life than those who control them. Greatest example. School choice. The party of the working people (you know what they are called) are against it because the teacher's unions control the public schools. They are disasters. I can tell you stories of homeschoolers who do better than the average public school children on intelligent tests. But, lets' say for example, President Obama or any of the Kennedy's do not want you to go THEIR private schools because--and is the key condition of socialism--THEY think that they are better than the rest of us. Socialism looks down on people by those who control the people.

And let's not talk about socialized medicine 'cause I can tell you horror stories (which, ironically, are not supposed to happen because it is government run.) Which begs the questions itself, if the goverment runs it--anything for example--why does that in itself make it better?

[tea drinker]

Hey obama without the Chinese buying our debt, were in trouble, srsly.

The Ameteur strikes again....
True, but it's not a sustainable policy. America will cease to exist unless something is done to stop that.

This move is one of those things. Until the trade balance is sorted between US and China, you have problems. Lost jobs etc. Right now there probably isn't much that China wants from you, apart from your money, or IOU's. Probably some military or science equipment. But it's hardly feasible to sell that.

US and Europe need to work on their costs, and the property crash is helping here. WTO need to work on something to fix this crisis.