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Two years after imposing punitive tariffs on Chinese-manufactured passenger vehicle and truck tires, the United States may launch a new round against truck and bus tires imported from China, reported 21st Century Business Herald based in Guangzhou, capital of Guangdong Province.
An official from the China Rubber Industry Association (CRIA) told the newspaper that they were trying to communicate with the U.S. side.
In September this year the WTO upheld the 2009 U.S. decision to impose punitive duties on tires imported from China.
Even though the WTO ruling was dubbed“a tremendous victory for the United States as well as for American workers and manufacturers” by U.S. Trade Representative Ron Kirk, the United States is not necessarily the beneficiary.
The punitive measure failed to help reduce U.S. tire imports, but hurt China’s tire makers.
More than one victim
The U.S. tire imports did not decline after the punitive measure.
Comparing the first half of 2010 with 2009, total U.S. tire imports affected by the tariff are up 30 percent by value. China’s share of those imports has dropped from a peak of 45 percent in August 2009 to just 24 percent in June 2010, according to a briefing issued by the U.S.-China Business Council in 2010.
U.S. imports of Chinese tires fell by 23.6 percent in 2010 and by a further 6 percent in the first half of 2011, while U.S. tire imports overall grew by 20.2 percent and 9 percent, respectively, according to statistics provided by the Chinese Preferment Mission to the WTO.
In other words, Americans are buying more tires from overseas, just not from China.
“It shows that tires made in China did not pose a threat to U.S. enterprises,”said Sun Yewen, an analyst with Caixun. com. “But the punitive tariff deeply hurt Chinese tire makers,” he said.
Since the three-year, tiered tariff on tires imported from China—35 percent the first year, 30 percent the second year and 25 percent the third year —was imposed in 2009, China’s tire industry has bled profits.
According to CRIA, the safeguard measures have caused nearly 30 tire makers in China to reduce their output or halt production, and more than 100,000 jobs have been cut.
Despite the fact that hundreds of thousands of Chinese tire workers lost their jobs, the tire tariff also failed to boost job creation in the United States.
Since the implementation of special protection measures in 2009, the U.S. tire industry’s employment has declined, rather than increased. U.S. tire manufacturing employment was 10 percent lower in the first five months of 2010, compared with the same period in 2009 before the tariffs were applied, said the U.S.-China Business Council.
Thomas Prusa, professor of economics at Rutgers University, estimates that “the tire manufacturing industry will experience little to no job creation as a result of the tariff. Under the best-case scenario, more than a dozen jobs will be lost for every job protected.” Prusa estimates a net loss of at least 25,000 jobs in the United States as the result of the tariff being imposed.
The U.S tire industry is still hurting and tires are still expensive, said Ma Guangyuan, an independent analyst.
As a result of the tariff, U.S. consum- ers suffered tire price increases. Around the time when Chinese tires were shut out of the U.S. market, the price of tires in the United States jumped over 10 percent.
Ma described the U.S. tariff as a decision “that harms others but brings no profit to itself either.”
In the wake of the WTO ruling, the Chinese Preferment Mission to the WTO said the U.S. decision is a protectionist measure imposed only to accommodate the country’s domestic political pressure.”
The U.S. Government needs to find a scapegoat for its sluggish economic recession and job loss, and China’s swift economic rise has given the U.S. a good reason to punish, said Wei Liang, an assistant research fellow with the Institute of World Economic Studies at the China Institutes of Contemporary International Relations.
“The WTO ruling over the tire case was against the basic WTO principle, namely, the non-discriminatory. China is not the only tire exporter for the United States, but the United States only targeted China. It is an utter discrimination against China,” Zhou Shijian, a senior research fellow with the Center for U.S.-China Relations at Tsinghua University.
“Using China as its scapegoat for an ailing economy and job losses, it will take a toll on the Chinese economy. As a matter of fact, the biggest loser will be the United States itself,” Ma said. “If not taken seriously, finally, the Sino-U.S. trade friction will be a disaster to the world economy.”
The United States has set a negative example for others. India, Argentina, Brazil and other countries have launched or intend to launch safeguards and antidumping investigations on Chinesemanufactured tires.
China’s loss in the WTO ruling is a big one. Because WTO rulings are adopted by all members, other countries are sure to follow suit in placing the blame for lost jobs or poor industrial growth on China, said Larry Lang, an economics professor at the Chinese University of Hong Kong.
Time to fight back
Actually, government subsidies exist widely in many industries in the United States with the automobile, aircraft and photovoltaic industries being the biggest beneficiaries of national subsidies, said Zhong Shi, an independent analyst of automobile industry.
“It is unfair. China should launch antisubsidy investigations on U.S. exports,” he said.
In September 2010, China began levying anti-dumping duties from 50.3 percent to 105.4 percent on imports of U.S. chicken products for five years.
The decision was based upon findings of an investigation by China’s Ministry of Commerce, which shows that the U.S. chicken industry has dumped broiler products into the Chinese market and caused “substantial damage” to China’s domestic industry.
Chicken from the United States is cheap, because the U.S. Government has been providing high subsidies for its corn planters, said Lang. From 1998 to 2008, Loan Deficiency Payment for the U.S. farmers cost its tax payers $29 billion. According to a Canadian report, for every dollar U.S. farmers earn, 62 cents comes from some form of government subsidy, with total aid from all levels of government adding up to more than$180 billion in 2009.
Among the subsidies, feed grains account for the biggest share of around 35 percent, cited Xinhua News Agency.
The United States announced on September 21, 2011 that it was taking action through the WTO by challenging Chinese duties on U.S. poultry products.
The move is illogical, said Xinhua. The United States does not check its policies on agricultural products. Instead, it took action against China, where a number of poultry industries have fallen victim.
An official from the China Rubber Industry Association (CRIA) told the newspaper that they were trying to communicate with the U.S. side.
In September this year the WTO upheld the 2009 U.S. decision to impose punitive duties on tires imported from China.
Even though the WTO ruling was dubbed“a tremendous victory for the United States as well as for American workers and manufacturers” by U.S. Trade Representative Ron Kirk, the United States is not necessarily the beneficiary.
The punitive measure failed to help reduce U.S. tire imports, but hurt China’s tire makers.
More than one victim
The U.S. tire imports did not decline after the punitive measure.
Comparing the first half of 2010 with 2009, total U.S. tire imports affected by the tariff are up 30 percent by value. China’s share of those imports has dropped from a peak of 45 percent in August 2009 to just 24 percent in June 2010, according to a briefing issued by the U.S.-China Business Council in 2010.
U.S. imports of Chinese tires fell by 23.6 percent in 2010 and by a further 6 percent in the first half of 2011, while U.S. tire imports overall grew by 20.2 percent and 9 percent, respectively, according to statistics provided by the Chinese Preferment Mission to the WTO.
In other words, Americans are buying more tires from overseas, just not from China.
“It shows that tires made in China did not pose a threat to U.S. enterprises,”said Sun Yewen, an analyst with Caixun. com. “But the punitive tariff deeply hurt Chinese tire makers,” he said.
Since the three-year, tiered tariff on tires imported from China—35 percent the first year, 30 percent the second year and 25 percent the third year —was imposed in 2009, China’s tire industry has bled profits.
According to CRIA, the safeguard measures have caused nearly 30 tire makers in China to reduce their output or halt production, and more than 100,000 jobs have been cut.
Despite the fact that hundreds of thousands of Chinese tire workers lost their jobs, the tire tariff also failed to boost job creation in the United States.
Since the implementation of special protection measures in 2009, the U.S. tire industry’s employment has declined, rather than increased. U.S. tire manufacturing employment was 10 percent lower in the first five months of 2010, compared with the same period in 2009 before the tariffs were applied, said the U.S.-China Business Council.
Thomas Prusa, professor of economics at Rutgers University, estimates that “the tire manufacturing industry will experience little to no job creation as a result of the tariff. Under the best-case scenario, more than a dozen jobs will be lost for every job protected.” Prusa estimates a net loss of at least 25,000 jobs in the United States as the result of the tariff being imposed.
The U.S tire industry is still hurting and tires are still expensive, said Ma Guangyuan, an independent analyst.
As a result of the tariff, U.S. consum- ers suffered tire price increases. Around the time when Chinese tires were shut out of the U.S. market, the price of tires in the United States jumped over 10 percent.
Ma described the U.S. tariff as a decision “that harms others but brings no profit to itself either.”
In the wake of the WTO ruling, the Chinese Preferment Mission to the WTO said the U.S. decision is a protectionist measure imposed only to accommodate the country’s domestic political pressure.”
The U.S. Government needs to find a scapegoat for its sluggish economic recession and job loss, and China’s swift economic rise has given the U.S. a good reason to punish, said Wei Liang, an assistant research fellow with the Institute of World Economic Studies at the China Institutes of Contemporary International Relations.
“The WTO ruling over the tire case was against the basic WTO principle, namely, the non-discriminatory. China is not the only tire exporter for the United States, but the United States only targeted China. It is an utter discrimination against China,” Zhou Shijian, a senior research fellow with the Center for U.S.-China Relations at Tsinghua University.
“Using China as its scapegoat for an ailing economy and job losses, it will take a toll on the Chinese economy. As a matter of fact, the biggest loser will be the United States itself,” Ma said. “If not taken seriously, finally, the Sino-U.S. trade friction will be a disaster to the world economy.”
The United States has set a negative example for others. India, Argentina, Brazil and other countries have launched or intend to launch safeguards and antidumping investigations on Chinesemanufactured tires.
China’s loss in the WTO ruling is a big one. Because WTO rulings are adopted by all members, other countries are sure to follow suit in placing the blame for lost jobs or poor industrial growth on China, said Larry Lang, an economics professor at the Chinese University of Hong Kong.
Time to fight back
Actually, government subsidies exist widely in many industries in the United States with the automobile, aircraft and photovoltaic industries being the biggest beneficiaries of national subsidies, said Zhong Shi, an independent analyst of automobile industry.
“It is unfair. China should launch antisubsidy investigations on U.S. exports,” he said.
In September 2010, China began levying anti-dumping duties from 50.3 percent to 105.4 percent on imports of U.S. chicken products for five years.
The decision was based upon findings of an investigation by China’s Ministry of Commerce, which shows that the U.S. chicken industry has dumped broiler products into the Chinese market and caused “substantial damage” to China’s domestic industry.
Chicken from the United States is cheap, because the U.S. Government has been providing high subsidies for its corn planters, said Lang. From 1998 to 2008, Loan Deficiency Payment for the U.S. farmers cost its tax payers $29 billion. According to a Canadian report, for every dollar U.S. farmers earn, 62 cents comes from some form of government subsidy, with total aid from all levels of government adding up to more than$180 billion in 2009.
Among the subsidies, feed grains account for the biggest share of around 35 percent, cited Xinhua News Agency.
The United States announced on September 21, 2011 that it was taking action through the WTO by challenging Chinese duties on U.S. poultry products.
The move is illogical, said Xinhua. The United States does not check its policies on agricultural products. Instead, it took action against China, where a number of poultry industries have fallen victim.