US penalizes Chinese tires, infuriating Beijing - Yahoo! News
WASHINGTON – President Barack Obama's decision to impose trade penalties on Chinese tires has infuriated Beijing at a time when the U.S. badly needs Chinese help on climate change, nuclear standoffs with Iran and North Korea and the global economy.
China condemned the White House's announcement late Friday as protectionist and said it violated global trade rules. At home, the punitive tariffs on all car and light truck tires coming into the U.S. from China may placate union supporters who are important to the president's health care push.Obama had until this coming Thursday to accept, reject or modify a U.S. International Trade Commission ruling that a rising tide of Chinese tires into the U.S. hurts American producers. The United Steelworkers blames the increase for the loss of thousands of American jobs.
The federal trade panel recommended a 55 percent tariff in the first year, 45 percent in the second year and 35 percent in the third year. Obama settled on 35 percent the first year, 30 percent in the second and 25 percent in the third, White House press secretary Robert Gibbs said
"The president decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case," Gibbs said.This is really bad policy considering China owns a ton of our debt and they are about to introduce some low cost econo cars to the U.S. either this year or early next.There hasn't been an obvious increase of exports of tires to the U.S., the statement said, citing a 2.2 percent increase in 2008 from 2007, and a 16 percent fall in exports in the first half of 2009 compared with first half of 2008.
The new tariffs, on top of an existing 4 percent tariff on all tire imports, take effect Sept. 26.
For the Chinese government, the tire dispute threatens an economic relationship crucial to China's economic growth. There was speculation before the decision that new tariffs could produce public pressure on Beijing to retaliate, potentially leading to a trade war.
All this crap does is penalize low income people in favor of union interests by raising costs on car and tires.