WASHINGTON – President Barack Obama on Friday slapped punitive tariffs on all car and light truck tires entering the United States from China in a decision that could anger the strategically important Asian powerhouse but placate union supporters important to his health care push at home.
Obama had until Sept. 17 — next week — 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. A powerful union, 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 slightly lower penalties — an extra 35 percent in 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.
Beijing issued a statement Saturday sharply condemning the U.S. move.
“China strongly opposes this serious act of trade protectionism by the U.S.,” the statement on the Ministry of Commerce Web site said. “This act not only violates the rules of the World Trade Organization but also violates the relevant commitments made by the U.S. government at the G-20 financial summit.”
By taking “this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs above current levels,” said Vic DeIorio, executive vice president, GITI Tire (U.S.), the largest manufacturer of tires in China.
The decision comes as U.S. officials are working with the Chinese and other nations to plan an economic summit of the Group of 20 leading rich and developing nations in Pittsburgh, to be held Sept. 24-25. China will be a major presence at the meeting, and the United States will be eager to show it supports free trade.
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Finally the rubber meets the road. The president inflates the price of imported tires hoping to protect the US tire industry from becoming unbalanced or seriously under inflated. The Chinese are gauging his response and had hoped Obama would tread lightly rather than risking a blowout in relations with China. There could be a bumpy ride ahead, with numerous potholes and speed bumps. Obama’s policies could need an up front re-alignment to ensure a smooth ride through this issue. He better check his spare before he gets too far into this trip or he could be left up on a jack somewhere down the road.
mid island mike
Coming soon to Canada, increased US tariffs will mean more job losses in Canada.
Time to look elsewhere for our goods, services and our much needed oil.
Time to look elsewhere for our goods, services and our much needed oil.
Are you speaking as an American, UV? If you speak as a Canadian, we produce enough of our own oil right here in Canada. We export oil. Our oil reserves rank # 2 in the world. Same goes for most everything else in the raw materials department. As for services, we cover that department as well with Canadian talent. I can buy non-American made items at my leisure. I don’t need anything America manufactures, as i can buy it somewhere else.
Protectionist Democrats will cause further job losses in Canada, especially in the lead up to congressional elections in 2010 and of course the 2012 election. Canadians can and should find other markets for our products. But the fact is we have been extremely fortunate to live right beside the best market in the world for years, when Democrats(socialists) start shutting it down it’s going to hurt, other markets are all thousands of kilometres away.
Good old Chicago-style politics.
Does Obama realize how much money the USA owes China. What if they call their loans.
I agree. The high tariffs don’t protect the national businesses, but harm the competition. The imported products from China are demanded, and free trade is the concept to apply on this situation.
Re: #8: Providing China reciprocates and permits western imports into Chinese markets without tariffs. Free trade is a two way street and things must be equal for it to work.
I do agree that free trade has both its advantages and disadvantages. But China’s market place has become so professional and developed due to free trade and numerous imports and exports, so high tariffs can only harm this.
In times when high tariffs weren’t put, the trade relationships worked just fine. For China, which started its economic reform in the late 1970s, this meant becoming the biggest producer of wholesale goods, and not only. Many areas of activity are now developed, and “made in China” products are now everywhere.
China sourcing is beneficial for everyone. The labor is cheaper, and the raw materials as well. Tariffs shouldn’t be imposed on Chinese imports.
What kind of content does somebody need to write to be able to guest post. I mean it has to be about something specific or completely random?
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