China counters American tire special guarantee

Officials from the Ministry of Commerce of China stated that the special insurance restrictions will damage the overall economic interests of the United States. China's industry writes that the government must

On August 3, a respondent delegation consisting of the China Rubber Industry Association, China Minmetals Chamber of Commerce and seven tire exporters went to Washington. Four days later, a hearing there could have pronounced the death of Chinese tire exports.

On June 29, the U.S. International Trade Commission issued a ruling on China’s special tire protection program for American tires, and proposed to impose a special tariff of up to 55% on tires imported from China. "The previous tariff was only 3%. If we increase it by 55%, we would be almost impossible to export to the United States again." Shen Weijia, executive director of China's largest tire export company, Jiatong Tire (China) Investment Co., Ltd., said .

On August 7, the U.S. Trade Representative's Office will call the parties involved to hold a hearing and then make a ruling. The final fate of China’s tires will require President Obama’s final decision before September 17.

In 2008, China exported 2.168 billion U.S. dollars to U.S. tires. This case has thus become the biggest trade dispute between China and the United States in recent years. Whether Obama finally confirmed the verdict has also become an important measure of the trade protectionism stance of the new US government. Although the safeguard clause was written in China's WTO accession agreement since 2001, during Bush’s reign he used the authority of the president to veto. All the special security cases.

"We have submitted a report to Premier Wen Jiabao reflecting the importance of this case to the industry." Fan Rende, president of the China Rubber Industry Association, said: "We call on the Chinese government to take appropriate countermeasures when necessary."

Sino-U.S. Enterprises Against American Workers

In addition to participating in the hearings in the United States, the Chinese responding team is even more important in lobbying the relevant government departments and members of the National Assembly to hope for a verdict in favor of China.

Fan Rende said that the industry has hired professional lobbying companies according to lawyers' opinions. The main targets of lobbying include the US Department of Commerce, the Ministry of Communications and the Office of the Trade Representative.

What is different from other trade frictions is that in the case of tires, the opposite of China’s industrial sector was the union organization of the United States rather than its peer company.

On April 20 this year, the U.S. International Trade Commission announced its acceptance of the US Steel Workers Federation’s application to investigate the Chinese tires disrupting the U.S. market. After that, several major tire manufacturers, including Michelin, Goodyear, and Bridgestone, remained silent.

“The implication of silence is that they do not serve as applicants, nor do they support applications.” Shen Weijia said: “Because they are very clear, Chinese tires have not caused any damage to them.

Special insurance is a clause added to China's WTO accession agreement. It only deals with China's exports to other countries and allows it to be restricted by tariffs, quotas, and tariff quotas. The period of validity is from 2001 to 2013.

According to the requirements of the United States International Trade Commission, Chinese industry associations and chambers of commerce submitted relevant appeal materials. It mentioned that Chinese tires are concentrated in the low-end market that US manufacturers have long abandoned and do not compete with similar products in the United States; from 2007 to 2008, the proportion of tires imported from China to the United States’ actual consumption increased by only 2.7%. Rapid growth.

In the questionnaire issued by the US International Trade Commission, for the “whether the imported tires imported from China were a cause of substantial damage in the US market”, four manufacturers responded “no” and the other four chose “cannot answer”.

“We have provided a lot of data and materials, but in the end the United States has almost completely failed to accept it,” said Liu Xiaonan, vice president of the China Minmetals Chamber of Commerce.

The US International Trade Commission’s final ruling was even more stringent than the US union’s expectations. In their appeals, they only asked for quota restrictions on Chinese tires, from 46 million in 2008 to 21 million before 2005. However, the US International Trade Commission ruling suggested that starting from September 2009, China's tires should be subject to 55% import tax for the first year, 45% for the second year and 35% for the third year.

After the proposal to kill Chinese tires was announced, within a month, the American Tire Industry Association, representing 6,000 small businesses, represented the importer, the US Tire Free Trade Association, representing the representatives of Chrysler, Ford and GM’s Automotive Trade Policy Council. The retailers’ U.S. Retail Leaders Association sent a letter to Obama or U.S. Trade Representative Kirk and opposed the International Trade Commission’s ruling.

Industry calls for retaliation against other products

After the controversy surrounding the ruling was fermented, the moral dispute over trade protectionism gradually evolved into a digital battle.

The American Iron and Steel Workers Federation estimates that due to the low price advantage of Chinese tires, 25,000 tire manufacturing workers in the United States have been affected.

The US Tire Free Trade Association estimates that if Chinese products are excluded from the United States through the application of tariffs, nearly 25,000 people will be unemployed in the field of tire distribution and retail sales. Every time this measure protects one job, the United States will lose another 25 jobs. At the same time, U.S. consumers spend an additional 600-700 million yuan each year.

The statistics of the China Association is that if China loses its largest export market, China will have 100,000 to 200,000 industrial workers affected. Shen Weijia said that this measure may force Chinese companies to squeeze 20%-30% of their production capacity, dismiss workers and shut down factories.

According to Wen Jiabao’s report in the China Rubber Industry Association, China's tire industry has experienced negative growth for the first time in 30 years in 2009 and exports have fallen by more than 16% in January-June. Under such circumstances, U.S. policy will have a fatal blow to the industry.

The actual blow that may be caused may even be contrary to the association's estimates. A Chinese Ministry of Commerce official stated that in accordance with the relevant laws on special safeguard measures, once the US ruling is established, other countries can directly adopt the same restrictions without investigation.

Unlike previous Bush’s resolute opposition to the special safeguard measures, Obama's attitude has been unclear so far. Because Bush has rejected the special security case four times for "damaging the overall economic interests of the United States", during his term of office, few U.S. companies applied for special protection measures to restrict Chinese goods. However, once the Obama administration has set a precedent, all Chinese export industries may be at risk.

On August 3, the person in charge of the Fair Trading Bureau of the Ministry of Commerce of the People's Republic of China stated in an open statement that the special insurance protection measures for Chinese tires "will harm the overall economic interests of the United States."

"If Obama approves this ruling, it is undoubtedly an act of trade protectionism. We hope that the Chinese government will be able to negotiate more vigorously, including taking vigorous countermeasures when appropriate," Fan Rende said. Although he acknowledged that China's import of tires from the United States is limited, it is of little significance to retaliate within the tire industry. However, the Association called on the Chinese government to consider other industries. "I believe the government has much room for this."

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