Although the trade dispute with China is over chickens, cars, and tires it is turning into much more than those three simple goods. President Obama announced that the United States will be putting tariffs (of up to 35%) on tires from China. This clearly did not go over well with the China as they issued a "formulaic criticism" of the decision that was announced. Also, on Chinese websites there were many acts of Anti-America "rhetoric." China then announced that it was going to begin imposing tariffs on American exports of automobile parts and chicken meat.
The United States does not want to have any disputes with China and is willing to discuss the tariffs but wants to be sure that the trade complies with the World Trade Organization's rules.
The decision to impose tariffs shows that Obama is becoming more strict on trade laws, especially against China, even though China is a "world's factory."
There has been a lot of trade activity this year between China and the United States. We have imported $1.3 billion in tires from China, which is a very large number, as well as exporting $800 million in automobile parts and $376 million in chicken meat. China says that they will begin investigating certain automotive parts and chicken meat to see if they were being subsidized or "dumped," in which case they will be able to impose a tariff on the imported goods.
Is Obama making the right choice by imposing possible large tariffs on Chinese imports such as tires?
2 comments:
The American and Chinese trade imbalance is an issue that could serve to be costly for the US in the future. It is important for the United States to lower the trade deficit with China, but not to the extent where it becomes a problem politically. It is smart for Obama to impose this trade tariff on Chinese automotive exports, because it will help the US automotive industry. However, it is important we do not have unfair trading practices, as in using subsidies or "dumping" surplus at a cheap price. These practices could prove to disrupt political ties between the US and China. It is a scary thought that on Chinese websites there has been rumors that they are going to sell back US treasury bonds. Overall, Obama should take this strict stance against Chinese exports (as he promised to Labor Unions), but in turn the US must practice fair trade policies.
The trade relationship between China and the US have been a big issue these days. I am especially interested in the issue of importing Chinese chickens. I personally believe food safety inspection requirements should be strictly enforced since it can directly connect to our daily lives. For tires, I agree with Matt that we should enforce some taxes since the trade deficits should be reduced and also protecting domestic markets should be critical to recover from recession.
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