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Vol. 73/No. 37      September 28, 2009

U.S. gov’t imposes
anti-China tariffs
(front page)
The U.S. presidential administration of Barack Obama imposed a steep three-year tariff September 11 on the import of all car and light truck tires from China.

The move reflected the underlying tensions simmering as Washington and Beijing compete for markets—tensions that mark international trade as a whole in the midst of the opening stages of a world capitalist depression. The White House sought to portray the reactionary, protectionist sanction as a measure to defend U.S. workers’ jobs.

The U.S. government slapped a 35 percent tariff on the tires in the first year, 30 percent the second year, and 25 percent the third. President Obama said the measures were taken because of a “surge” in tire imports from China.

China tire imports tripled between 2004 and 2008. But China’s commerce ministry spokesman, Yao Jian, told reporters that in the first half of 2009 those sales dropped by more than 15 percent.

According to Yao, four U.S. companies have tire factories in China and account for two-thirds of the exports to the United States.

Over the last 15 years, as the Chinese government has expanded exports and opened up more of the country to capitalist investment, the Chinese and U.S. economies have become more interconnected.

U.S. exports to China mushroomed from about $13 billion in 1999 to $70 billion in 2008. Chinese exports to the United States grew from $82 billion to $338 billion.

“Exports to the United States, at 6 percent of China’s entire economic output, account for 13 times as large a share of the Chinese economy as exports to China represent for the United States economy,” noted the New York Times.

Although China has 1.3 billion people compared to 307 million in the United States, the per capita gross domestic product in the United States is almost eight times higher than in China.

Beijing is the largest single holder of U.S. treasuries, with $700 billion worth. Chinese premier Wen Jiabao has pressed Washington to take measures to keep the U.S. dollar from continuing to weaken against the Chinese yuan in order to protect the value of Chinese investments.

But Beijing “has relatively few secure places to park its huge foreign-exchange reserves other than U.S. Treasury bonds and government-backed U.S. mortgage securities,” said the Washington Post.

While the Chinese government has protested the U.S. sanctions, it has not so far imposed new sanctions of its own on U.S. goods.

Instead, it has launched an antidumping and antisubsidy probe of U.S. exports of chicken and auto products to China. It also filed a formal complaint with the World Trade Organization (WTO) over the tariff hike.

The United Steelworkers (USW) union claims 5,000 tire workers in the United States lost their jobs due to the Chinese imports.

“For the first time in 20 years, we have a president who stood up to enforce the laws that have been robbing workers of their jobs,” Leo Gerard, USW president told cheering delegates to the AFL-CIO convention in Pittsburgh, Pennsylvania.

The Steelworkers officials helped lay the basis for the higher tariffs by filing a case against the Chinese imports with the U.S. International Trade Commission in April.
Related articles:
Labor and anti-China tariff  
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