U.S. to Impose Tariff on Tires From China

[bcassill]

Re: U.S. to Impose Tariff on Tires From China

The problem that the U.S. and the rest of the world are up against now is the upcoming dumping of manufactured goods onto the world markets via China. China has continued to manufacture many things and has counted them as "sales" even though no one is buying. Where do you think all those goods collecting dust in the warehouse are going to end up? If I were the Chinese government, I would be more than happy to sell the garbage at below cost if it meant keeping a few more people at work. Remember the regime's biggest enemy there is unemployment.

Whether we are slapping tariffs on our end or they are subsidizing "dumping," neither one is very smart. The problem is that it is going to be difficult politically for any government in the developed world not to respond to this. We can talk about open borders and free trade all we want, but the world never had a system of free trade. The game has always been rigged in favor of those with currency pegs and closed markets (i.e. the emerging market countries). Western manufactures loved it as a way (in many cases) to screw local workers and get around domestic safety and pollution regulations.

The problem is that globalization, off-shoring, and outsourcing is DOA. Rising geopolitical tensions will show just how fragile global supply chains really are. Best of luck to those companies that have built their operations around them.

[touchring]

Re: U.S. to Impose Tariff on Tires From China

Besides the goal of maintaining unemployment, selling at below cost is actually a business strategy, and a very common practice in China - lower prices below cost, force your competitors out of the business, and then raise prices.

This is business strategy planning at the national level, the Chinese are not fools. They have done this so successfully with rare minerals.

Unemployment is what the Chinese government fears most. There's no social security net, workers will turn against their managers if they know they will be layed off, like that steel plant manager that was beaten to death.

If they have to give away their manufactured goods for free just to keep the workers employed, they will do that.

The problem that the U.S. and the rest of the world are up against now is the upcoming dumping of manufactured goods onto the world markets via China. China has continued to manufacture many things and has counted them as "sales" even though no one is buying. Where do you think all those goods collecting dust in the warehouse are going to end up? If I were the Chinese government, I would be more than happy to sell the garbage at below cost if it meant keeping a few more people at work. Remember the regime's biggest enemy there is unemployment.

[Penguin]

Re: U.S. to Impose Tariff on Tires From China

Free and fair trade always has been the hardest topic to get my head around. The people who work at tire factories or at used to work at textile and shoe factories may not compete in alot of metrics with high tech avaition. Even given that fact, is it not better to see men and women earning a fair wage and contributing to their communities. These blue collar workers tend to put down firm roots. Coach little league, attend communtity fundraisers for unfortunate or unlucky members of the communtiy. In short they are the chassis of the American automobile.

In this world of today and tomorrow there will always be somebody who can do your job for less. Maybe not as good, but the price differential can make up for it.

No it is much better to continue to ship jobs overseas where an intentionally undervalued yuan keeps their products cheaper than ours regardless of man hours used to manufacture the product. And be sure to turn a blind eye to mandatory tech swaps and factory moves per China's trade policy. This will allow America to destroy any semblance of a middle class therefore bringing us all a more prosperous and stable union...

Haven't you been reading the Mish Bible? It's all in there friend. Embrace the horror.

Will

[BiscayneSunrise]

Re: U.S. to Impose Tariff on Tires From China

Don't know if people will be longing for "W", but if someone had suggested in January that the next President would be a one-termer I would have been sceptical. No longer...

GRG, et al:

This track Obama is taking shouldn't surprise anyone. We were adequately warned by conservatives leading up to the election.

Problem was that the hatred of George Bush and the coolness factor of having the first black president overrode most other factors.

Obamamania made him unbeatable. The mass hysteria that swept him into office is a double edge sword and may very likely turn against him when people aren't getting the change they counted on.

For instance: a co worker was a strong Obama supporter, donated money and volunteered his time. His issues were the war and legislation germane to our industry. He, however, is very satisfied with his health care. During a recent discussion on health care he expressed frustration that Obama and the Democrats are spending so much political capital on cap and trade and health care and not on his hot button issues.

Conversely, and this is very disturbing, a different conversation with a friend in Carmel, CA: This other friend is as liberal as could possibly be. When I asked her about President Obama, her face lit up and her whole body softened. She said that she loved Obama, was willing to pay even more in taxes and give up any thing she had to support his agenda. She knew he would ALWAYS make the correct decision because he "is channeling the universe." !?!?!?!?!?

[BK]

Re: U.S. to Impose Tariff on Tires From China - Can the USA say NO to our SugarDaddy (China)

Mula - I'm no fan of the Chinese. But, can we the USA successfully engage in a trade War with the Biggest Holder of US Treasuries? $776 Billion in Treasuries held by the Chinese -

http://www.treas.gov/tic/mfh.txt



MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD

Jun
Country 2009
------

China, Mainland $776.4 Billion
Japan 711.8
United Kingdom 2/ 214.0
Oil Exporters 3/ 191.0
Carib Bnkng Ctrs 4/ 189.7
Brazil 139.8
Russia 119.9
Luxembourg 104.2
Hong Kong 99.8
Taiwan 77.0
Switzerland 71.6
Germany 53.9
Ireland 46.3
Singapore 40.8
India 39.3
Korea 36.3
Thailand 29.7
Mexico 29.5
Norway 28.7
Turkey 27.5
France 26.0
Canada 19.0
Netherlands 18.9
Israel 18.1
Egypt 17.3
Italy 16.8
Sweden 16.5
Belgium 15.7
Chile 14.3
Colombia 11.8
Malaysia 11.7
Philippines 11.6
All Other 157.6
Grand Total 3382.4

[mfyahya]

Re: U.S. to Impose Tariff on Tires From China

Stupid decisions Obama has made to date:



6.) LETTING DR. CHOU HEAD THE U.S. DEPT. OF ENERGY;

What's wrong with appointing Dr. Chu, a Nobel laureate, as head of the DoE? He may be a propenent of bio fuels, but he is against corn based ethanol for very valid reasons.

[radon]

Re: U.S. to Impose Tariff on Tires From China - Can the USA say NO to our SugarDaddy (China)

Mula - I'm no fan of the Chinese. But, can we the USA successfully engage in a trade War with the Biggest Holder of US Treasuries? $776 Billion in Treasuries held by the Chinese -

An argument could be made that we already have and that is the reason they are stuck with so much of our paper while we have their goods and services.

[touchring]

Mula - I'm no fan of the Chinese. But, can we the USA successfully engage in a trade War with the Biggest Holder of US Treasuries? $776 Billion in Treasuries held by the Chinese -

http://www.treas.gov/tic/mfh.txt

China itself has got lots of its own problems that are hidden.

You don't see it being discussed because nobody knows the real extent of the problems, government figures are completely fake, to the extent of switching MINUS to PLUS. I doubt even the central government knows because local officials will submit fake figures to heighten their chance of promotion - the common practice i read is the add a zero to the final figure.

Take for example, China's exports has been dropping more sharply than Singapore's. And Singapore's 1Q GDP was -10% versus China's +6%.

[skyson]

Re: U.S. to Impose Tariff on Tires From China

China itself has got lots of its own problems that are hidden.

You don't see it being discussed because nobody knows the real extent of the problems, government figures are completely fake, to the extent of switching MINUS to PLUS. I doubt even the central government knows because local officials will submit fake figures to heighten their chance of promotion - the common practice i read is the add a zero to the final figure.

Take for example, China's exports has been dropping more sharply than Singapore's. And Singapore's 1Q GDP was -10% versus China's +6%.

i am not sure what you talking about.

adding a zero to all figures? exageration does not help your position. what are the compositions of Singapore GDP? last time i heard Singapore is basically a FIRE economy(finance + international trading). Zero production. Don't even compare Singapore with China. Apples to oranges.

[tsetsefly]

Re: U.S. to Impose Tariff on Tires From China

"Free trade" and globalization has been bad for the vast majority of Americans. I am all for tariffs. The Chinese have an ENDLESS supply of slave labor. The world cannot compete with that. I would much rather we save our industries with tariffs instead of bail-outs. (plus it would be a way to raise taxes). Yes, there are side-effects. Things will be more expensive, for example. But, the experiment of the past 20 years has been a dismal failure for Joe Six-Pack.

Bring on World Tariff War 2!!!...

horrendous decision, its like the studied everything the government and central bank did during the great depression and they are repeating it to a t...

[Starving Steve]

Re: U.S. to Impose Tariff on Tires From China

At least eight (8) reasons why Dr. Chou was the wrong guy to head the U.S. Dept. of Energy:

1.) Chou opposes up-grading of tar sands in Alberta because of his mistaken worries about man-made global warming;

2.) Chou has not come out in support of nuclear power;

3.) Chou has not supported the construction of hydro-electric dams;

4.) Chou has instead, supported geo-thermal energy development in cities where no hot springs or guysers exist;

5.) Chou has not come out with a major plan for America to switch to natural gas for vehicles, nor has he been outwardly in favour of putting diesels into vehicles (to use diesel fuel);

6.) Chou has been a major supporter of windmills, tidal power, and solar power as a solution;

7.) Chou so far has been anti-coal, anti-oil, anti-drilling, anti-oil shale, anti-tar sand, anti-coal-to-oil, and even non-favourable (or silent) on the idea of exploiting natural gas as a solution;

8.) Chou was a supporter of carbon taxes and cap-'n-trade as a solution.

[cburch24]

Re: U.S. to Impose Tariff on Tires From China

Saving a high-tech industry that produces significant added value makes sense. What's so high tech about saving a few tire factories? Next, they will want all the textile and shoe factories to return to America.

In a future with more expensive energy, yes, I would actually prefer my (bike) tire, textile and shoe factories nearer to me. I've grown accustomed to these things and would not like to find myself cut off from them.

[touchring]

Re: U.S. to Impose Tariff on Tires From China

i am not sure what you talking about.

adding a zero to all figures? exageration does not help your position. what are the compositions of Singapore GDP? last time i heard Singapore is basically a FIRE economy(finance + international trading). Zero production. Don't even compare Singapore with China. Apples to oranges.

Unlike Hong Kong, Singapore has a big manufacturing sector. Latest figures are that is is 26% of total GDP, which works out to 62 billion a year, mostly for exports I presume.
http://en.wikipedia.org/wiki/Economy_of_Singapore

Singapore's FIRE economy is doing well despite the financial crisis, some major banks even had higher profits than last year, so the drag came from manufacturing.

[bcassill]

Re: U.S. to Impose Tariff on Tires From China

The WSJ just picked up on this story this morning (front page). The Chinese are threatening to retaliate against the U.S. on chicken and auto parts imports. However, almost in the next sentence, the story goes on to say that these two imports into China are already tightly controlled so there likely would not be that huge an impact on America's exports in these two sectors. Interesting point. For all you free trade fashionistas, why would the Chinese have tight controls on imports? Don't we live in world of brotherly love, unicorns, rainbows, and other such nonsense?

For those of you who still believe that the rest of the world plays fair when it comes to commerce, well, think again. We've used open access to the American market as a foreign policy gimmick for far too long to the detriment of our manufacturing base and the American worker. You can argue all you want about wage differentials, unions and the like, but you cannot get around the fact that too many of our trading partners use things like lax safety and environmental standards and currency pegs to artificially drive down the cost of their goods and services. It's only because many of these nations recycled their excess reserves into the ballooning U.S. government debt that has allowed this game to continue.

Well, the cycle is bust because everyone is worried about our continued deficits and are beginning to look upon U.S. Treasuries with the same disdain as mortgage backed agency debt. While the tit-for-tat tariff exchanges are probably stupid in the long run, perhaps someone in Washington will finally wake up to the fact that our trade policy is non-existent and needs to be rethought.

Sorry to rant, but this topic is just more complex than just saying people here are paid too much.

[MulaMan]

Re: U.S. to Impose Tariff on Tires From China

The solution is "free trade" in lawyers.

Allow illegal Mexican lawyers and Indians of exceptional ability on H1-B visa's into the country to under-cut the hourly wage rate of lawyers and hence most of those in Washington D.C.

"Free Trade" anti-American laws would then start to change quickly.

There was a day when buying American was patriotic, now Americans are simply idiotic....

Obama seem to have more courage and is more patriotic then all you combined.

and yet the Fox fools keep failing in line.