题 目:Challenges or Opportunities: a Case Study of U.S.
Special Protectionist Tariffs on Chinese Tires
U.S. President Barack Obama's decision to impose punitive tariffs on tires imported
from China has triggered concerns about the rise of protectionism in the lead-up to the
Pittsburgh G20 meeting later this month.
Australian Trade Minister Simon Crean described the timing of the decision as “dreadful,” saying “it sends the wrong signal, we must be stepping back from measures that invite retaliation.” He said the decision would make it more difficult to achieve progress at the G20 toward finalizing the Doha Round trade talks. Bob Ulrich, editor of U.S. magazine
the Modern Tire Dealer, wrote in an article titled “President Obama announces tariffs in the
dark of the night” that “it was a hot button issue, one with potentially serious ramifications.”
Neena Shenai, an adjunct scholar at the American Enterprise Institute, warned Wednesday in
a commentary article that “American consumers and downstream U.S. tire businesses will suffer, and trade relations with China will be needlessly damaged.”
Eswar Prasad, professor of trade economics at Cornell University, warned of an escalation of the disagreement. “These protectionist measures, some of which amount to domestic political posturing rather than substantive restraints on trade, could easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries,” he
said. An article by the Editorial Board of the Christian Science Monitor said it is likely that
Mexico or other low-wage countries will simply step up their tire exports to the United States and fill a void left by fewer or more expensive Chinese tires. “In the end, Americans who have worked in tire factories will need to retrain themselves for higher skilled jobs in
emerging fields where the United States is more competitive. Meanwhile, this tariff means
U.S. consumers will pay more for tires,” said the article.
Nowadays, with the rapid development of world economy, more and more countries have the dependence on the other countries. And the dependence is becoming higher and higher than before. Being the biggest developing country and the one of the most important
economic state, China is facing the largest number of special protection in world trade after
entering the WTO , taking the U.S. Special Protectionist Tariffs on Chinese Tires for
example, which has brought more and more influences to Chinese economy. But we should
pay more attention to that influences. The Challenges or Opportunities? We should judge it
objectively and wisely. How to realize it and solve it is the most important issue to Chinese government. Only in this way, can we use the rules well and development ourselves more effectively.
Blokker, Niels, ed. International Regulation of World Trade in Textiles. Mrtinus Nijhoff
Donald, Johnson, C. U.S.一China Trade: Opportunities and Challenges. Georgia Journal of
International and Comparative Law, 2005 (Fall): 45-47.
Jackson, John H., ed. World Trade and Law of GATT. The Bobbs: Merril Company Inc.,
Krishnamurthy, Vivek. The Emperor’s New Quotas: U.S. and EU Trase Public on Chinese
Textiles. Yale Journal of International Law, 2006 (Winter): 22-23.
刘洪，刘丽娜.轮胎特保案，美国开了坏先例(中国青年报，2009，9！:13( 肖炼(世界金融危机发展趋势--对中国经济的挑战与机遇(国际贸易，2009，5！:15-18( 殷凤(世界服务贸易发展趋势与中国服务贸易竞争力研究(世界经济研究，2007(6):22-25(
In 2007, the US supreme mortgage crisis triggered by the financial crisis swept the world. Every country falls into the general economic downturn or even recession. In order to save the domestic market, governments pay special attention to take effective measures to keep their national economy develop well. So, the trade wars among the countries broke out in great frequency. As the largest developing country and one of the most important economic entities, China has been suffering many kinds of trade restrictions from western countries since entering WTO. A growing number of trade measures have been aimed at Chinese goods in the last ten years, in the other words, the trade protection against China for unfair trading has been increasing rapidly.
This paper, by taking the “U.S. Special Protectionist Tariffs on Chinese Tires” as the main
carrier, combined with the various forms of restrictions against China from Western countries as the background, is aimed to analyze the pros and cons of the case on China in terms of employment, economic development and Sino-U.S. relationship. It also presents some reasonable proposals on how the Chinese Government should respond to this case. Accordingly, China can protect its legitimate rights and interests well to maintain a sustainable economic growth and enhance its international competitiveness further and further.
2. Trade Protectionism
2.1 The definition of Trade Protectionism
“Trade Protectionism” refers to the import restrictions in international trade to protect
domestic products against the competition from the foreign goods, and offer concessions to their products to enhance their international competitiveness, which is a very common trade protection policy.
The main purpose of trade protectionism is to protect the domestic market in order to
promote the development of domestic products well and give their own products preferential treatment and subsidies to encourage exports.
Here are the Trade protection cases against China in these years as following:
On December19, 2008, the United States appeal to the WTO and hold the idea of that China violated the rules of the organization on textiles, refrigerators, chemical products and some other brand products subsidy.
On January 27, 2009, the U.S. International Trade Commission voted against the Chinese anti-dumping duty on spring mattress in order to provide support for the U.S. Department of Commerce to charge 164.75 to 234.51 percent of tariffs on the non-closed internal spring component from China.
On February 1, 2009, EU Council announced to charge 77 to 85 percent levy punitive tariffs on Chinese fastener enterprises for a period of 5 years.
On September 12, 2009, Obama announced to charge special tariff restrictions on Chinese import tires.
In the recent years, various kinds of trade protection keep springing up among the countries, which has produced negative impacts on the national economy.
2.2 Special Protectionist Tariffs
The so-called "Special protectionist Tariffs” refers to Transitional Product-Specific
Safeguard Mechanism" and "special safeguard measures" for short. Special safeguard measures are a kind of trade protectionism. Take the “U.S. Special Protectionist Tariffs on Chinese Tires”
in 2009 as example, which, briefly speaking, is the kind of method used by the United States to raise the tariffs on Chinese imports of tires in order to protect their own national stakeholders.
The substitution effect is the result of the kinds of changes in the nominal price of goods, while the resulting combinations of goods purchased by consumers in the commodity and other commodities between the alternatives.
In general, when the Special protectionist Tariffs (or the trade restrictions among the countries) rose or a revenue declines, due to substitution effects, the economic and trade relationships among the countries will be threatened.
3. Challenges presented by the case
Every coin has two sides. The “U.S. Special Protectionist Tariffs on Chinese Tires” in
2009 has brought a great many of influence to China and American itself, which incarnates not only in the field of trade and economy, but also in the field of diplomacy. As the result of the case, what we can see is that the trade war between china and America has been upgraded. 3.1 Impact on the employment
The “U.S. Special Protectionist Tariffs on Chinese Tires” in 2009 has caused tremendous
impacts on the employment in China. The U.S. is the largest export market of tire from China. The Special Protectionist Tariffs on tires made great restrictions on Chinese tires exporting into the U.S. market.
According to preliminary estimates from China Rubber Industry Association, “There will
be about 30 million factories cutting production and stop production because of special protective restrictions. As the largest export market, if we lose the U.S. market, China will have 100,000 to 2,010,000 workers from the industry of tire losing their jobs.” “Tires safeguard
involves more than 20 Chinese enterprises, once the ban passed, there will be about 100,000 Chinese workers losing their jobs. At the same time, it will affect the interests of many U.S. dealers and producers, besides, there are 2.5 million people in the United States will be unemployed. ” (Jackson 224)
Once so many people get unemployed, the pressure of employment both on Chinese and the U.S. government will become increasingly serious. Moreover, this kind of impact will spread to the other sectors. Triggered by this situation, a serious of social problems will become more and more. “The decision will not promote the employment of the U.S., except to cause trade disputes”. (Rumsfeld 146)
So, it is important to solve the problem of employment effectively, because employment is an important criterion to measure a country’s prosperity. Under these conditions, the Chinese
government should take effective measures to deal with the issue.
3.2 Impact on the national economy
As the largest export market, the tire exported from China into America accounts for almost 40 percent of the total production.
According to the statistics, Chinese tire exported into the United States amounts to 2.2
billion U.S. dollars in the last year. If the American government charges the tires on the basis of substantial levy punitive tariffs, it will lead to the loss of the U.S. market. China will lose 2.2 billion U.S. dollars. “The U.S. safeguard measures on Chinese tires will undoubtedly cause great impacts on our export, and even on the process of economic development.”(Vivek 342) Worse
more, if the product shifted in exports in China, the domestic market will be saturated; there will be a new round of price-cutting trend and vicious competition and further would cause great damages to China's tire industry. Even it can lead a serious hidden danger to the development of China.
Additionally, a serious of chain reactions will occur gradually. For example, some other countries might follow the U.S. to make any other restrictions on Chinese commodities. In last October, Argentina’s government said they will refer to the previous practices of Brazil and the United States, to construct anti-dumping investigation on Chinese tires. All of these trade restrictions may do great harms to Chinese economy. Trade protectionism would limit the flow of the global economic system, and this kind of trade protectionism will spread around the whole world, making the world economic situation worse than before.
3.3 Impact on Sino-U.S. relationship
Since entering the WTO, China continues to increase its rank in the international trade. China and the U.S. have been the trade partners for a long time. After entering the WTO, the bilateral trade between China and the U.S. increased at the speed of 20：. According to Chinese
statistics, in 2009, China’s exports to the U.S. reached almost 162.9 billion U.S. dollars,
accounting for 21% of total exports, compared with imports from the United States, accounting for 48.7 billion U.S. dollars, the trade surplus reached 114.2 billion U.S. dollars. In 2009, the U.S. exports to the world market at the rate of 13%, while to China's export growth rate is as high as 32%. Meanwhile, U.S. statistics show that in 2009 U.S. exports to China reaches 350 billion dollars and imports amounted to 197 billion U.S. dollars. China has become the one of the largest export market and the second largest import market of the United States, during the last 10 years, the United States trade deficit with China increased four times, after 2008 China has replaced Japan as the largest trade surplus with the United States.
As the only superpower and the largest developing country in the world, the relation
between the U.S. and China has the very important effect on world peace and development. Therefore, their relation has been focusing the world attention. In recent years, the relation between the U.S. and China presents a good and healthy momentum of development. The communication and cooperation in international affairs are increased gradually between the two countries. The emergence of the “U.S. Special Protectionist Tariffs on Chinese Tires” has put a
cast of shadow over the Sino-U.S. relationship, especially between their relationships in the field of economic trade.
The impacts caused by the “U.S. Special Protectionist Tariffs on Chinese Tires” in 2009 to
China are comprehensive. This incident not only affected the economic and trade relationship between China and the U.S., but also affected any other important areas of bilateral cooperation. So, how to handle this issue well has vital effects on Sino-U.S. relationship. 4. Opportunities brought by the case
The impacts brought by the “U.S. Special Protectionist Tariffs on Chinese Tires” in 2009 to
China are comprehensive in all sides. It has brought challenges to China; meanwhile, it also has brought opportunities to China.
4.1 Well prepared for trade restrictions
Essentially speaking, the “U.S. Special Protectionist Tariffs on Chinese Tires” in 2009 is a
kind of trade protectionism. As the largest developing country and one of the most important economic entities, China has been suffering many kinds of trade restrictions from western countries since entering WTO. The “U.S. Special Protectionist Tariffs on Chinese Tires” in 2009
is just a special case of them.
Recently, the exchanges in the field of economy are becoming increasingly close among the countries in the world; we can foresee that there must be different trade protections against China in the future. So, how to face and solve the coming cases is very important. Through this special case, we can get some way to deal with similar incidents or trade restrictions to follow.
Through the “U.S. Special Protectionist Tariffs on Chinese Tires” in 2009, we can better
understand the rules of the WTO to perform the legitimate rights of the member of the WTO to safeguard our own legitimate interests in the coming trade restrictions.
4.2 Enhancing the competitiveness of Chinese economy
Everything has its reasons for the emergence. Through the “U.S. Special Protectionist
Tariffs on Chinese Tires” in 2009, we should re-look at our own: why on earth can the special case arise?
Of course, the cause and effect of the case might be very complex, but we should consider this special case from another angle.
Is it because the qualities of our products are not good enough to meet their needs? Is it because our after-sales services are not perfect? Is it because the price of our products unreasonable?
The competitiveness of the economy among countries in the world has been becoming fiercer, so we should pay more attention to Enhancing the competitiveness of Chinese economy to compete with the other countries.
Chinese economic growth will depend on the development and expansion of the domestic market, the huge consumption potential of the domestic market in the next few years will absorb a large number of products. So, how to improve the quality of our product and how to improve our services plays great role in developing our domestic market. All of these factors should be considered seriously, only in this way, can we find our weak points clearly; and only in this way ,can we improve the competitiveness of our products, can our economy develop healthily and stably.
4.3 Improving China’s international status
With the rapid development of China-U.S. relationship, a relationship of interdependence, mutual benefit and win-win basic pattern has founded. This kind of relationship has brought great benefits to the people of the country, even to the whole world.
As the only superpower and the largest developing country in the world, their relationship has been attracting the world attention. We can consider the “U.S. Special Protectionist Tariffs on
Chinese Tires” in 2009 as an opportunity to make other countries know that Chinese government has the ability to deal with the important issues which related to its interests. So, how to handle with this special case well is very important to improve China’s international status.