China-US Trade War?

Posted by: Dexter Roberts on October 12, 2009

One more sign that trade tensions are heating up between China and the world: as announced on the Ministry of Commerce’s website today, Beijing will impose tariffs as high as 37.5% on a kind of chemical (polyamide-6/6 chips, is its full name) used in manufacturing plastics and textiles, and imported from the U.S., U.K., Italy, and France, as well as Taiwan.

That follows Washington’s decision last Wednesday to start an anti-dumping and anti-subsidy investigation against Chinese steel pipe imports, and an earlier decision a month or so ago to slap tariffs on China-produced automobile tires. The E.U. for its part levied tariffs against China-produced screws and bolts early this year. Beijing which has been voicing its concerns about rising protectionism for quite some time, and already filed a complaint with the WTO about the U.S. tariffs on tires, is about to do the same with the E.U. tariffs on metal parts, Bloomberg is reporting.

Mofcom too had choice words over the weekend about what it sees as protectionism focused particularly on the pipe investigation: “Blind accusations of dumping or subsidies in Chinese imports is lacking in factual basis, which China strongly opposes.” With president Obama due to make his first head of state visit to China next month, all eyes will be watching this potential trade war now brewing.

Reader Comments

CompEng

October 12, 2009 11:18 AM

China has been in a trade war for same time: they've just been "winning" in the sense that most of their measures have gone unopposed.

Is it not interesting that an announcement of an investigation should be received as a "blind accusation". China is very skilled at protesting over small offenses to fend off larger ones.

Zak

October 12, 2009 11:29 AM

China is AGAINST protectionism?? Really??!

ej6

October 12, 2009 12:15 PM

U.S. citizens can only benefit from a trade war with China, i.e. they will return to jobs, pay taxes (as oppposed to receiving them), and experience a rise in their standard of living. Just for grins: Does anyone have stats on how much Federal money comes from tariffs vs. taxes on its citizenry?

isiah

October 12, 2009 1:14 PM

this isa good story

emenot

October 12, 2009 2:39 PM

This is inevitable, China had been granded a favorite trading country since Clinton's watch with allowing for wide open export with little or no duty or tarrif, now EU and USA is finally feeling the pinch China is acting like a spoiled child and wonder why they are not allow to act as a baby anymore....

JJW

October 12, 2009 4:04 PM

ABOUT TIME.
China makes junk !!!

Strategery

October 12, 2009 9:07 PM

Boo hoo. China has not embraced free trade as America and Europe have and it has been destructive to the economies that China trades with. Did you know that China can impose tariffs of 25% on most goods under the WTO rules? They also fix the value of their currency, give tax breaks to export industries, and keep foreign companies out of their markets and industries. What about pollution, hazardous working conditions or farmers displaced by factories? Trade war? BRING IT! China will lose much more than the USA or Europe.

C. H . Ng

October 13, 2009 12:37 AM

What do we expect...? These kind of tit-for-tat trade wars are going to happen anytime, anywhere. You start to impose some kind of trade sanctions and/or increase tariffs on any goods, they will do the same to you. The Chinese called it..(literally translated in English) "You do me on the 1st, I will do you on the 15th".

As far as I am concerned, a trade war is still ok as long as it won't escalate to a real war! Still I think in the long run, everybody will suffer as there won't be any winner at all.

So to all the powers-to-be, PLEASE THINK & CONSIDER CAREFULLY THE IMPACTS OF ANY TRADE WAR. THERE WON'T BE ANY WINNER HERE, ONLY LOSERS.

jim

October 14, 2009 4:48 PM

@JJW: Absolutely true, guess who bought all those junks home?? and better yet, guess who borrowed money to buy all those junks home?? We used to say Japan made junks in the late 50's and the 60's, did u count how many Toyotas at the last intersection?? Think deep and u shall find yourself.

jose

October 15, 2009 3:06 PM

@ej6, we can tax more on their tires, they would have less revenue, so they would buy less of our U.S. bonds. do u get the picture?

Rider I

November 4, 2009 3:28 AM

Um I believe that the Communist pretty much Tariff everything and they are one of the least free economic countries in the world. Where they come over here invest in our business and property and buy our debt. While they import and crush our jobs market and our quality of life.
There is no Trade war. They are crushing us with their low quality of life.
http://www.census.gov/foreign-trade/balance/c5700.html

http://www.export.gov/logistics/eg_main_018142.asp#P130_5867

Trade war don't make me laugh. China has a lower quality of life that is the only way that it makes any sense that products being build all the way across the ocean then sent here are cheaper. By the way if CEO's did not make millions and billions of dollars and we paid a buck or so more for our products our neighbors could have jobs, our government could have taxes, hey and guess what we would not have to be paying 25% Federal Tax and upwards of %15 State tax because there would be more corporate and income tax here at home.
Just a thought. There is no trade war.

Rider I

November 4, 2009 3:50 AM

Us Unemployment Rate:
9.8%
http://www.dol.gov/

So if my Math is correct:
305,529,237 * 9.8%=~ 30,000,000

Of American citizens without a job. While our production moved overseas, our aristrocats got fatter, and our Federal government took more power from the States and Individuals.

Certainly Sir. Maam, Hows about some good old born and Raised made right here in America. Not Hecha In Mexico, or my US hat or cowboy boots made in China or Tawain.
I am sorry, it makes no sense to me.
We export our jobs, we export our customer service, we are supposed to come up with new industries but have not.
Every one things that American will keep buying without middle class to poor jobs, and the bubble bursts. Now our economy is based on debted taxes.Don't get me wrong I love my jeans from Walmart that the zipper breaks in two months.
Oh wait oh yes and now the biggest employer in America is the biggest explorter of the Communist Governments oppression of their people's quality of life. WALMART welcome to your destruction of tax dollars, production. But hey I shop there it is survival when quality of life stops to drop one has to eat, cloth and have necessities.
Trade war funny, more like Hey US welcome to the NWO.
Solution, the same amounts that are Tarrifed on US goods shall be tarriffed on Chinese goods. If they tarrif 27% of our goods then we tarriff 27% of their goods. If our trade deficit each year to China is around 100 trillion then we find some way to middle ground that.
I am sorry I do not believe in the Communist WTO version of forget the name but exploit this country because they are labors and then you do what you do best.
I still believe in independence, liberty and freedom for all, not dependence, economic oppression through low balling, and freedom for fat cats or the Federal government.

ps

November 4, 2009 10:18 AM

Rider I- REAL unemployment is close to 20% when you count underemployed part timers and those that gave up looking. A large part of manufacturing moved offshore is driven by consumer habits, the need to save a few times and to hell with the factory worker. It is lalso ironic that middle class Chinese consumers tend to turn their noses up at cheap and inferior goods that Wal Mart is famous for. The corporations and governments are not to blame. It is the US consumer. You can see them on the People of Wal-Mart website.

Cougar Jon

November 11, 2009 8:35 AM

Rio Tinto, remember that story? Right now China is contracually developing (controlling) resources all over the world with the promises of higher than present market value in US $'s. When the US currancy collapses they be calling the shots globally. Right now Canada is the largest source of imported oil into the US but China exceeds these volumes already and is expanding pipe line capacity to the ports in British Columbia while buying into the Alberta Tar sands. Wake up.

C. H. Ng

November 13, 2009 2:07 AM

@ Cougar Jon,

When the Americans took over the baton from the British after WWII and controlled much of the world's economy & not to mention making the decision which government/regime is to be propped or desposed, the westerner world never complained. Now with a slight reverse of fortune which is totally your country's undoings, you just cannot face the real fact that God is sometimes fair...remember in our history of mankind, empires rise & fall.

I am not saying US has already fallen, yet, but I for one won't be shedding my tears if she really does. I have nothing against your country but sometimes what your government did or has been doing is just too much; she has been trying to be the sole power in this world & wagering wars everywhere all in the name of human rights & freedom. Remember your country is not God or even the Chosen One to dictate how our world is going to live. If you think your way is the best, so be it & just live as whatever you like but please don't force it down on our throats.

Don't do what you won't like others to do to you. Take just one example; your country (and other superpowers) have been drilling oilwells legally or forcibly far beyond your shorelines for decades but once other country tried within their legal rights to do so near your shore, there is alot of hues of cries. Is that your version for your so-called "freedom of speech"? Nevertheless you are right in a sense when you called your fellow Americans to "wake up". Yes, you people better wake up to see where you are going wrong as you are not always right, you know?!!

C. H. Ng

November 16, 2009 2:59 AM

Further to my earlier comment, I hereby like to show you Americans another example of how your leader/government gone wrong in pursuit of your country's ideas to the rest of the world.
Your President, Mr Obama, is now in China and here is one extract from his speech which I found it rather ridiculous. He said "These freedoms of expression, worship & access to information & political participation -
we believe they are universal rights. They should be available to all people, including ethnic & religious minorities whether they are in USA, China or any other nation". My question here is WHY he is trying to single out China alone?
WHY he or your government leaders or your press never or seldom hammered such topic to countries such Saudi Arabia or Pakistan, no need to mention more? Are they practising better freedoms of religion and/or speech? Are the people there allowed to believe in other religion beside the Muslim faith?
Can you see any church or temple there?

I don't or can't see such thing there but I don't believe in condemning them. If they think they are doing the right things, so be it. So long they don't go to the extreme. And I believe too why America & certain western countries are always condemning China is because they fear a rising China; a strong China who will not listen or bow to their command. Other countries like Saudi Arabia & Pakistan are nothing & not so strong and therefore the westerners don't bother to condemn them.

plumblossom

November 16, 2009 9:35 AM

@ C.H. Ng

You are so right.

C. H. Ng

November 16, 2009 10:53 PM

I would like to put my comment on the current China-USA issues & the current meeting between both leaders in China:-

1) On the currency -- whether the yuan is readjusted or not has both the pros & cons to China. The western countries cannot & should not use its low value to make argument for the trade imbalances. All these are just excuses for their own failures in addressing their countries' bad economies. If they want to blame the yuan's low currency value, they can also devalue your own currency, right?

2) On human rights & freedom of speech -- these are in my opinion, only applicable at this moment to well developed countries & not in developing or undeveloped countries with huge populations & where poverty are still common. But please don't get me wrong; I am not saying the 2 issues are bad but different country's situation calls for different idea and/or solution. So here I implore the westerners to stop demanding or insisting these issues till China has become developed & majority of her huge population have passed the poverty line. I believe once the Chinese people have achieved that, the issues will automatically disappeared & became a non-issue.

3) Trades -- imposing tariffs will only resulting in a tit-for-tat trade wars. The end result? No winner, only loser & more economic woes & longer time to take to get back on our feet again.

4) North Korea & Iran & green energy --
these are more urgent & everybody, not only USA & China, should sit down and resolve these pressing needs.

5) China's Internet control -- it's her (China's) own business & for heaven's sake, leave it be. It's not own damned business anway.

C. H. Ng

November 17, 2009 9:56 PM

I had another comment posted 2 days ago which apparently the people in BW must have thought it's too offensive to be printed here. Nevertheless today I intend to write another one to express my view on China-USA / Western Countries relationship.

Generally I believe most westerners have foreseen the rise of China but were shocked & never expected that she will rise that fast. So much so the surprise now turned to worry. I can understand their fear but I guess most of them don't understand the Chinese. I do as I am also a Chinese albeit not from China.

To begin with, first of all you got to understand the history of China & her people. During the period when she was labelled as the "Sick Man of Asia" where foreign powers were taking advantage to control parts of her territory to the Japanese occupation to the civil war before the Communist finally won & the failed Cultural Revolution where millions died from starvation, the Chinese people have suffered enough.
Then came along this little great man whose saying about not caring whether the cat is black or white as long as it knows how to catch the mice, it's a good cat. He opened up China while maintaining the Communist Party's grip on power. 30 years later a modern China arises but in a different way --
the country may be the richest in the world in terms of her vast foreign exchange reserves but many of her people are still poor in terms of per capita income.

If you are to travel to China & mix around with the people there, you can see what matters most to them is money, money, MONEY. They have no time for other thing else & so do you think they want to look for trouble or confrontation with other country? The answer of coz is "No". But having said that, the modern younger Chinese people have seen enough of the humilations & sufferings during their elder generation time and now will definitely stand up to face any obstacle thrown in their path. This will include any direct confrontation if it cannot be avoidable.

The relationship between USA & China (the world's largest & soon-to-be the 2nd largest economies) is too interwoven & complex that it's like a married couple. They need each other as much as the world needs them. Nevertheless there are bound to be a little quarrel here & there and so like a married couple, a little kiss & hug will save the day.

Gary

November 30, 2009 11:14 PM

Just stop buying the Chinese goods as far as possible. I have minimised my consumption when it comes to chinese goods.

C. H. Ng

December 1, 2009 9:00 PM

Oh yes...that's the way Gary; you don't like something, just don't buy it!
No need to go out complaining or condemning other people's products. Nobody is going to or can force you to buy something which you have some misgivings and/or that goes against your principles.

If we are to look carefully on the issues of any trade war or problem, it all boils down to the self agendas of the businessmen. On one hand you have the local manufacturers who want to see their products selling well & at a good price. On the other, you have local importers who want to buy things on the cheap so that they can sell at a greater profit. So the importers start sourcing from oversea markets which eventually affect the local manufacturers' sales markets. The latters got no choice but to run to their local politicians to seek their helps to try to stem the flow of imports. Politicians being politicians will take up their issues & find all sorts of ways to argue their case. One of which is the usage of medias to simply fire all sorts of propagandas & twisting some facts. The end result? Trade war.

So who is really at fault? Generally not most of the exporters or the importers or the manufacturers or the politicians. It is only a small group of people with self interest of making as much money as possible in whatever way but the main fault lies with us, the consumers who allowed our naive minds to be influenced by the medias.

Think about it & I would like to welcome your comment on this issue.

Gary

December 5, 2009 5:54 AM

These businessmen and politician who try to make money do not understand the long term implicatons. China has a very bad record of human and animal treatment. Now it is powerful enough and creating lots of problems for all the countries.
Well stop buying chinese products for atleast coming 10 years and US can be better off by then.

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