Obama ignored the many opposition voices in China and decided to impose a punitive tariff of up to 35% on Chinese imported tires.
On the 11th, the U.S. government announced that it imposed special tariffs on tires from China. On the 13th, the Ministry of Commerce of the People's Republic of China announced the initiation of an anti-dumping and anti-subsidy filing review procedure for certain imported automotive products and broiler chicken products originating in the United States. Although the Ministry of Commerce’s statement did not mention tires, analysts believe that this move is clearly a counterattack on China’s protectionism against the United States.
The trade friction between China and the United States suddenly increased, and the mainstream media in the West reported extensively. It is believed that if China and the United States conduct trade wars at this time, it is tantamount to a heavy blow to the global economy that has just emerged a new recovery.
Foreign media sound
China decides to take into account domestic public opinion
According to the analysis of The New York Times, both Chinese and U.S. governments have obviously faced domestic pressure in adopting such measures, although at present the two countries are seeking cooperation to cope with global challenges such as the Iranian and North Korean nuclear issues. Wu Bangguo, chairman of the Standing Committee of the National People’s Congress of China, has just ended his visit to the United States. U.S. Secretary of State Hillary Clinton also announced that China and the United States will conduct the first institutional dialogue on counter-terrorism this autumn. As far as the United States is concerned, during the election last year, Obama had promised to the trade unions of the voters, especially the United States, to strengthen trade law enforcement. The preferred target was obviously aimed at China. At present, Obama’s domestic support rate has fallen to a new low since he took office, and the reform of medical insurance cannot be promoted. Obama urgently needs more support from the people.
The Chinese government’s decision also faces domestic public pressure. Since the U.S. government announced on the 11th that it imposed special tariffs on tires originating from China, there have been many voices in China’s domestic online forums to counter U.S. Asked the government to sell its holdings of US Treasuries. Victor Shi, an expert on economic policy at Northwestern University in the United States, said: "All policy development is not only a trade policy, it will increasingly respond to the public opinion of the Internet."
In the past five years, the U.S. Department of Commerce has imposed restrictions on almost all goods imported from China, from bras to oil well equipment. China's response has often been much more complaints but it has seldom taken action. As the President of the United States personally decided to impose special tariffs that triggered widespread media coverage in the Chinese media, there were also many voices on the Internet that required the government to be tough.
Trade frictions will be under control
The outbreak of trade disputes is detrimental to both China and the United States, and it is also detrimental to the recovery of the global economy. The report issued by the European Central Bank not long ago said that trade protectionism will only lead to mutual retaliation, which is not conducive to the recovery of the global economy. For China, China is more dependent on exports than the United States. In the first half of this year, China has replaced Germany as the world's largest exporter. Some economists believe that for China, the greater risk is that trade frictions may lead some multinational corporations to reconsider their reliance on Chinese factories. As a result, factories will be distributed in more countries and parts. Procurement will also be more diversified.
Regarding the dispute between China and the United States on tyres and broilers, Bloomberg analyzed that the United States may appeal to the WTO. Iverson’s former representative to China, Eswar Prasad, said that this is also likely to be a topic for the G20 Pittsburgh Financial Summit and Obama’s November visit to China from September 24th to 25th.
Tires, bras, and other products involved in disputes between China and the United States account for only a small part of the trade products of the two countries. David Cohen, an economist at the Institute for Action and Economic Research in Singapore, said: “Despite trade frictions, I think that the two countries will put their disputes under control. They understand that as trading partners, both countries rely on each other ."
News analysis
Why does the United States throw a "special security case" at this time?
In recent years, an outbreak of disputes between China and the United States has caused many people in the United States to worry that China will sell US Treasury bonds and thereby suppress US capital markets. Many people also describe the huge amount of US dollar assets held by China as a countermeasure against US nuclear weapons. In 2007, when the United States was pressured to appreciate the renminbi, British media reported that China may sell US Treasury bonds as a revenge. When this report came out, when the United States’s then-President Bush responded, he himself did not obtain similar information from Chinese officials.
China currently has more than two trillion U.S. dollars in foreign exchange assets, most of which are U.S. treasury bonds and other U.S. dollar-denominated assets. Since Obama took office, because the financial crisis is still deepening, the United States has indeed relied heavily on China to purchase U.S. government bonds. At that time, Finance Minister Geithner also blurted out when he accepted the Congressional nomination hearing that China was a currency manipulator, causing market downturn. Later, Geithner specifically clarified this.
As of today, the global economic recovery has seen green shoots and the US economy has stabilized. The United States’ dependence on China’s purchase of its national debt has been reduced. China’s purchase of government bonds is now much smaller than it was a year ago. This is partly due to the increase in the domestic savings rate in the United States. Other private investors have also begun to purchase government bonds to escape the market. risk. Therefore, although the United States still has similar concerns, it has not been as strong as before.
China Counterattack Why Choose Cars and Broilers
The United States imposes special tariffs on Chinese tires. Why did China launch anti-dumping and anti-subsidy filing procedures for single-point cars and broiler products? The Bloomberg News Agency said the move was mainly aimed at the two very politically influential industries in the United States. If Obama’s tire killer on Chinese tires is to please the Steel Workers’ Federation, the industry groups in the auto industry and agriculture are not influential in American politics. In terms of the automotive industry, the reason why the U.S. government made huge investments to rescue the Big Three Detroit was also to curry favor with auto workers. Nowadays, China is a major highlight of the global auto industry and has become the largest auto market. General Motors currently has many worldwide The local business is bleak, but it is a double-digit growth in China and it is profitable. In agriculture, U.S. farmers have long been lobbying the U.S. government to help open China’s 1.3 billion market. U.S. exporters of pork, soybeans and other agricultural products on September 3 urged Obama to exercise restraint and not to levy special tariffs on Chinese tires and fear retaliation from China.
According to Bloomberg analysis, these two groups may persuade Obama to abandon the challenge to China for the sake of self-interest, and China’s current move will also trigger a game between different interest groups within the United States.
View related topics: China and the United States tire special security case
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