The American government — everyone is keen to blame President Barack Obama, but it is difficult to see how he came to the decision alone — has decided to impose trade penalties on Chinese tires. This has infuriated Beijing at a time when the US badly needs Chinese help.
China condemned the White House’s announcement as protectionist and said it violated global trade rules. So why did it happen? Petty politics. In the United States, punitive tariffs on all car and light truck tires coming into the US from China may placate union supporters who are important to the president’s health care push.
Spokesman Robert Gibbs told reporters traveling with Obama to a health care event in Minneapolis that 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.” It is presumed that he rattled off this rubbish with his face straight. And that he did not mention the need to placate union supporters.
Chen Deming, China’s minister of commerce, said the penalties would hurt relations with the US. A ministry statement said Obama had made the decision because of “the political pressure of the U.S. domestic trade protectionism.”
Chen Deming said, “The Chinese government will continue to uphold the legitimate interests of China’s domestic industry and has the right to take corresponding measures.”
Obama had until this coming Thursday to accept, reject or modify a US International Trade Commission ruling that a rising tide of Chinese tires into the US hurts American producers. The United Steelworkers blames the increase for the loss of thousands of American jobs.
The federal trade panel recommended a 55% tariff in the first year, 45% in the second year and 35% in the third year. Obama settled on 35% the first year, 30% in the second and 25% in the third.
Spokesman Rober Gibbs, still with a straight face, 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.”
The decision comes as US 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.
Governments around the world have suggested the US talks tough against protectionism only when its own industries are not threatened. US rhetoric on free trade also has been questioned because of a “Buy American” provision in the US stimulus package.
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.
Breaking News 24/7 said the new tariffs, on top of an existing 4% tariff on all tire imports, take effect Sept. 26.