In the case of special tyre protection for the United States: not only Chinese companies are opposed to it, but representatives of the United States industry also believe that the sanctions against Chinese tyres outweigh the benefits, and that special protection measures will save 25 posts for one position.
A “Tire Special Safeguard Case†hearing involving 100,000 Chinese workers and 20 tire manufacturers was held on the morning of the 7th at the US Trade Representative Office in Washington. According to the announcement of the US International Trade Commission on June 29, the United States will impose 55%, 45% and 35% punitive tariffs on Chinese tire imports to the United States in the next three years. As a result of this special security case, 100,000 Chinese workers are affected, and the United States will also lose 25,000 jobs.
In 2008, China's passenger vehicle tires exported 55.58 million items to the United States, amounting to US$2.168 billion. 40% of Chinese-made tires are exported, and 1/3 of them are exported to the United States. If the above measures are passed, Chinese tires will be lost to the United States by nearly half, reaching about US$1.1 billion, which will cause a heavy blow to the Chinese tire industry.
China launches fire line lobby for U.S. government
August 7th will be the last opportunity for Chinese tire companies to plead. On the last three days before the hearing, the Chinese Tire Industry delegation arrived in Washington and launched a 72-hour fire lobby on the U.S. government. This team is headed by Cai Weimin, Secretary General of the China Rubber Industry Association Tire Subcommittee, and Xu Wenying, Deputy Secretary-General of the China Rubber Industry Association. The members include the Minmetals Chamber of Commerce and seven companies including South China Tire and Jiatong Tires.
“We have the determination and confidence to get good results from the communication and let President Obama decide not to take special safeguard measures before September 17.†At 8 o'clock on the August 4th, local time, Cai Weimin, secretary general of the tire division of China Rubber Industry Association, was in Washington. The hotel where he stayed told reporters.
The Chinese side made full preparations for this trip. In public opinion, the Chinese delegation held a press briefing in Washington on August 5th; China also hired Spooner, former assistant secretary of the US Department of Commerce, as a defense lawyer.
This may be the first lobbying war against Chinese companies in the field of anti-special protection. Fan Rende, president of the China Rubber Industry Association, said: "The China Rubber Industry Association and all companies involved will spare no efforts in fighting the matter."
U.S. Steel Workers' Federation Asking for Price
A total of 9 groups of witnesses were given a hearing at the hearing. The square consists of the United States Steel Workers’ Federation that submitted the special security investigation, and the anti-party is composed of the American Tire Association, the China Tire Association, and Sino-U.S. tire production and marketing companies.
At 9.35 a.m., the representative of the United Steelworkers of the United States spoke first. Leo Gerrard, chairman of the American Iron and Steel Workers' International Business Unit, claimed that the 55% high tariff in the first year still cannot weaken the competitiveness of Chinese tires. The U.S. government’s punitive tariff should reach 75% to 80%.
Gerard said that this is because the massive import of Chinese tires has harmed the interests of the US tire industry. According to the statistics of the association, between 2004 and 2008, a total of five US tire factories closed down, 5,100 American workers were unemployed, and another 3,000 American workers were laid off this year.
American industry opposes
China’s hearing on the special case of tires sold to the United States has been protected against people’s interests through trade protectionism. It is the strongest voice issued by the hearing. Most U.S. industry representatives who testified that the proposed sanctions against Chinese tires are simply not worth the candle. James Mayfield, president of Del Norte, a tyre distributor that testifies on behalf of the US Tire Free Trade Association, said that if the government accepts sanctions, "thousands of Americans will lose their jobs in the marketing area." This is because American tires Manufacturers are no longer producing low-end tire products. They will not start new production lines because Chinese tire imports are blocked. Dealers can only turn to South Korea, Brazil, Mexico, and other third countries, which will cause market confusion in the short term.
Thomas Plusa, professor of economics at Rutgers University, pointed out at a hearing that according to his research, if the United States uses tires to protect a job, it will result in the loss of 25 jobs, which will amount to the United States. The loss of 25,000 jobs has added to the job market in the United States.
Charles Othes, vice president of the US Automobile Trade Policy Committee, representing the interests of GM, Ford, and Chrysler, said that sanctions on Chinese tires will increase the cost of U.S. cars and damage the U.S. auto industry’s competitiveness. The United States tire industry brings benefits.
Chinese tire industry representatives argue for power
In response to the US Steel Workers’ Association’s practice of declaring “original sin†to China’s tires, Xu Wenying, deputy secretary-general of the China Rubber Industry Association, retorted that the reasons for the closure of US tire factories were not due to the increase in Chinese tire sales to the United States, but because of US tire manufacturers. Adopting a product upgrade strategy, the company abandoned the low-end tire market with less profit, while Chinese tires are mostly low-end products and do not constitute a threat to US tires.
David Spooner, the US attorney representing China's tire industry, said that China’s transfer of American tires is a legitimate and legitimate transaction. There is neither low-price dumping nor illegal subsidies, and the trade union’s proposed special security sanctions There is a kind of protectionism, and "the trade unions are only benefiting from special protection cases."
American tire maker chooses silence
It is worth noting that the prosecutor of this special security case is not a tire manufacturer, but the so-called US Steel Workers’ Union, which represents the interests of workers. For this special security case, the American manufacturer, who was an important affiliate, chose to be silent. Of the Chinese tires exported to the United States, a significant portion are produced by the U.S. manufacturers in China or OEM in China. The special security case is not in the interests of U.S. manufacturers; however, U.S. manufacturers are currently facing difficulties due to ongoing labor negotiations between tire manufacturers. Powerful pressure, so choose to stay quiet.
According to the US investigation procedure, Obama is expected to make a final decision on the case before September 17.
U.S.Steel Workers’ Federation Challenges Obama
Public opinion here points out that the ruling on this case will become a severe test of the Obama administration's trade policy toward China. Some analysis pointed out that the special security case has a political color that cannot be overlooked. As Obama has been in power for 200 days, his domestic support rate has dropped significantly from before. At this time, the problem of unemployment is an extremely sensitive political topic. The U.S. Iron and Steel Workers Union’s assertion of this case on the basis of unemployment is actually a problem for Obama.
If passing or causing other industry chain reactions
It is worth noting that if the "tire special protection case" is supported and passed, the adverse impact it will have will directly affect the current economic recovery. For once the Obama administration "opens up its mouth", it is very likely to cause a chain reaction in other U.S. industries, triggering a mixed fight in global trade and delaying the economic recovery. If the "tire special protection case" is vetoed, a signal will be released to curb similar "surveillance" impulses in other industries and other economies.
At present, the world economy is at a critical moment when it is about to recover from recession. It is a test for Obama to suppress economic recovery with trade protectionism or to promote economic recovery based on the common interests of both parties.
News background
Tyre protection may cause "double loss" consequences
The Chinese company delegation to the United States defending and complaining about the tire special security case stated in Washington on August 5th that the United States’ special protection case against China’s tire shipments to the United States was totally unfair. Once it is implemented, it will result in a “double lossâ€. Xu Wenying, deputy secretary-general of the China Rubber Industry Association, said at the press conference that the tire protection case involved more than 20 Chinese companies. Once established, about 100,000 Chinese workers will be affected. At the same time, it will also affect the interests of many US distributors and raw material producers, and it is estimated that 25,000 people in the United States will also lose their jobs.
According to a recent announcement by the US International Trade Commission, the United States will impose 55%, 45%, and 35% punitive tariffs on Chinese tire imports to the United States within the next three years. The case involved about 1.7 billion U.S. dollars. It is reported that President Barack Obama will make a final decision on whether to take special safeguard measures before September 17. According to Xinhua News Agency
Financial perspective
The U.S. tire protection program is misunderstanding and farce
In the end, it is a misunderstanding or a farce in the United States to China’s special case for tire protection. From the perspective of economic interests, the United States’ special case for China’s tire protection should be a “misunderstandingâ€, which represents US auto makers, retailers, and tires. A clear statement of the many positions of the importers and many other organizations with interests in the industry can be seen. Behind this is the fact that China’s tire export products are mostly low-end products and that China’s domestic tire market is actually occupied by foreign capital. It is “realized†by the US Steel Workers’ Federation that Chinese tires that “grab American workers’ jobs†are actually It is a thorough "weak."
In recent years, while increasing technical barriers in the United States and the EU’s two largest tire export regions, China has also continuously relaxed access conditions for foreign investment in the tire industry. While the international and domestic high-end tire markets have been monopolized by large multinational tire companies, Hundreds of Chinese tire companies, which mainly produce low-end products, have fallen into the edge of the survival crisis of "internal and external attacks."
If we look at the inertia of protectionism, this can be seen as a "farce." Because nowadays, the strange phenomenon that “every Chinese goods must talk about anti-dumping†is popular in the world, it seems that American trade union organizations have “smeared†Chinese tires in line with this “trendâ€.
This case of China's special security for tires also gave Chinese enterprises a real reminder, do not ignore the role and power of foreign trade union organizations in reality. Looking at SAIC Motor’s acquisition of Ssangyong Motors in the same year, it was also due to the toughness of the trade unions and the strike that caused Ssangyong’s reorganization to fall into an “impasseâ€. Whether it is overseas mergers and acquisitions or export trade, fully considering the "risk" of foreign laws and labor organizations should be a key factor to be considered in the "going out" process of Chinese enterprises.
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