Since Obama could not obtain better terms of trade for the United States, he would sign a document to raise the tariff on imported tires in China in order to appease his supporters in U.S. trade unions. These people are very important to him in implementing the reform of medical insurance.
On September 11th, after signing the document to increase the tariffs on Chinese imported tires, President Barack Obama can be confident that he will be warmly welcomed outside the venue of the global G20 summit held in Pittsburgh from September 24th to 25th. .
Pittsburgh is home to the United States Steel Workers’ Federation (USW). This organization representing 9 states, 13 factories, and 15,000 workers, on April 20 this year, drew the Obama administration to investigate special safeguard measures for imported tires in China.
The organization pointed out that from 2004 to 2008, the number of tires imported from the United States from China increased by 215%, and the amount increased by 295%. In the past few years, the United States has already closed six tire factories. To this end, it requires the U.S. government to set 21 million import quotas for Chinese tires each year. In 2008, the United States imported a total of 46 million tires from China.
On August 7, the China Tire Association and companies participated in a hearing organized by the U.S. Trade Representative. However, the Obama administration still agrees that from September 26 onwards, imported tires (cars and light trucks) from China will be levied with high protective tariffs for three consecutive years, 35% in the first year, and will be decremented by 5% each year thereafter.
Fan Rende, president of the China Rubber Industry Association, said, "Chinese-made tires have 40% of exports, and one-third of them are exported to the United States. According to preliminary calculations, this will affect the employment of about 100,000 Chinese workers and lose about $1 billion worth of exports."
The Ministry of Commerce stated that the results of such a ruling would not only fail to solve the so-called “20,000 unemployment problems of the tire industry’s manufacturing workers†proposed by the United States, but that it would seriously affect about 100,000 US-dependent American tire importers and sales personnel. Employment issues.
In fact, the launch of this special protection clause has forced Obama to face greater pressure in the international community.
The G20 summit has been held twice before. This meeting to resolve the crisis through the economic downturn and how the world survived the crisis was first held in Washington, DC, in November 2008. In April of this year, the second conference was held in London, England.
In fact, a few months ago, when the 20 leaders left London, they had already solved issues such as excessive dividends in the banking industry and development strategies. This time at the Pittsburgh summit, they will face even more thorny problems. The trade issue. The reason is that, after the global economy and financial system have stabilized, the continued development of international trade will directly affect the speed of recovery of various economies. They must find a reasonable balance between their free trade and protectionism that suits their country and reach consensus.
In the previous two summits, although they were politically motivated and all countries deliberately or unintentionally ignored trade topics, they still believed that trade protection measures should be reduced. This time Obama's tire tariff policy for China is likely to bring a fatal blow to the good start being made.
The obvious signal is that on the second day when the U.S. government raised tariffs, the Chinese government has decided to conduct anti-dumping and anti-subsidy investigations on some cars and broilers from the United States.
The reporter believes that tire protection is not just for tires.
In the multi-round consultations between China and the United States on the special case of tire protection, the United States opened conditions related to China's steel, aluminum, chemicals and other products, but also related to China's fiscal policy, that is, hope that China's export products can adjust the tax rebate rate low. Because the asking price proposed by the US is too high, especially related to tires and other products, many rounds of consultations have not reached an agreement.
In order to maintain the pace of economic recovery, all countries are deferring the withdrawal of economic stimulus policies. If China accepts the conditions of the United States, it will affect the implementation of the VAT regulations and affect the domestic economic recovery plan. “This goes far beyond the tire case itself.†On September 14th, Yao Jian, spokesman of the Ministry of Commerce, said that the Chinese side did not discuss any topics other than the special security case and could only reach a solution within the tire case.
During the tenure of former President Bush, there were also six similar trade protection proposals, four of which were rejected by Bush and two were directly rejected during the ITC investigation phase. Why is Obama so bold this time? The “New York Times†believes that Obama’s decision is to appease his supporters in U.S. trade unions, who are of great significance in implementing the reform of medical insurance. He said that it would rather give up re-election, but also to implement health insurance reform.
The reporter believes that standing on the Obama's position, after he made a high bid for China on the grounds of tyres, he could only follow suit and make the current decision. In this sense, we can understand why, after signing the document to increase the tariffs on imported Chinese tyres, he defended that the U.S. government’s declaration of exporting US tires to China is not a sign of protectionism to the world, nor is it intended to provoke China.
Then, how will the decision on the Sino-U.S. tire special security case end? This is testing the Chinese government.
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