Made in China Two Seater Electric Car
Washington Post Staff Writers Saturday, September 12, 2009.
In one of his first major decisions on trade policy, President Obama chose Friday to impose a tariff on Chinese tires, a move that fits his campaign promise to fight against imports that unfairly undermine American workers but the risk of displeasing the second trade partner nation.
The decision aims to strengthen the tire U S ailing industry, where more than 5,000 jobs have been lost in the last five years, the Chinese tire market volume has tripled.
It comes at a sensitive time, but the leaders of largest economies in the world are preparing to meet in Pittsburgh in less than two weeks to discuss further cooperation in the middle of trade tensions.
The tire tariff will be 35 percent the first year, 30 percent the second and 25 percent the third.
Although a federal trade group had recommended higher levies - 55, 45 and 35 percent, respectively - the decision is considered a victory for the Steelworkers union, which filed the trade complaint.
The president sent the message that we expect others to live by the rules, as we do, Leo W Gerard, president of the union said Friday.
The Chinese government and its tire manufacturers and tire importers and some U S tire manufacturers with plants overseas, objected vigorously to the measure.
The President decided to remedy the clear disruption to the U S tire industry based on the facts and the law in this case, the White House said in a statement issued late Friday.
Obama's decision signals a marked change in the policy of the Bush administration, dismissing an action in four similar cases it has examined.
The union complaint was filed under a law Congress passed in 2000 that allows the US to impose tariffs and other trade protection if higher Chinese imports damages a U S. industry
China agreed to the provision when negotiating with the World Trade Organization, but until Friday the general safeguard provisions of the law has never been invoked.
Critics have warned that if the general safeguard, which expires in four years, has never been used to protect American workers from Chinese imports, while the political support of free trade would be eroded.
Since China joined the WTO, American workers are not assured that the government defending against unfair trade, Sen. Sherrod Brown said D-Ohio.
The price, which will take effect on September 26 is the first case under the law for Obama, and his decision was highly anticipated.
During the campaign, he promised to get tough against China and to ensure that China does not receive a bye to undermine the U S workers, as their website has.
But his commitment to this view has been challenged in the primaries when a Canadian official said an Obama advisor had characterized his private firm position on the North American Free Trade Agreement as political posturing.
Marguerite Trossevin, which represents a U S tire business coalition that import Chinese tires, said the rate decision is very disappointing She plans a price increase for consumers and U S losses to U S. tire importers
For US tire distributors and consumers, it will be a heavy burden to bear, she said it sends the message that special interests seek protection if they so request - regardless of what it means to trade policy wider.
Ministry of Commerce said in a statement Saturday morning that China's movement has violated WTO rules China strongly opposes this serious act of trade protectionism by the U S, the ministry said, according to The Associated Press.
Unsurprisingly, there were conflicting predictions about the effect of the tariff would have on the U S. industry
Proponents said the measure would have a negligible effect on the price of tires and lead the U S manufacturers to invest in their factories U S.
The tariff critics said prices higher tire could lead some consumers to wait longer before replacing the tires, creating a safety hazard In addition, they said, the price gained t cause more Tires jobs just come in other countries at low cost, they say, and US manufacturers, continue to make their cheaper tires in China.
U S Tire manufacturers there a few years ago decided to move the production of low-end tires off-shore, said David Spooner, a lawyer representing the Chinese tire industry Frankly, a temporary tariff will not get to change their business plan.
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