U.S. Says China Violated Trade Law

[FreakinDJ]

Source: Peter Whoriskey Washington Post Staff Writer

U.S. Says China Violated Trade Law

In one of the largest U.S.-China trade cases ever, the U.S. Commerce Department has issued a preliminary finding that Chinese steel pipe producers have received government subsidies in violation of trade law, helping them overrun the competition.

The volume of steel pipes imported from China more than tripled between 2006 and 2008, rising from $632 million to $2.6 billion, according to the Commerce Department.

The subsidies from the Chinese government allowed the firms to overwhelm their U.S. rivals, according to six U.S. companies that filed the complaint along with the United Steelworkers union. The companies alleged that their Chinese rivals received discounts on raw materials and loans from government-owned firms.

To even the playing field, the Commerce Department has ordered that tariffs ranging from an estimated 11 percent to 31 percent be imposed on the steel pipes from China.



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/09/09/AR2009090902768.html

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"There will be No Economic Recovery without Restoring the American Manufacturing Industry"

It so nice to have an administration intelligent enough to understand predatory trade practices devised to cripple and destroy whole industries in America's economy

[Igel]

1. It sounds like the Commerce Department,

in response to a suit filed with it, essentially expanded the scope of the tariffs announced in summer 2008. Then the tariffs imposed were on circular-welded steel pipe imported from China.

Yes, "It so nice to have an administration intelligent enough to understand predatory trade practices devised to cripple and destroy whole industries in America's economy." I don't think you meant it that way, though.

[OhioChick]

2. K&R n/t

[pampango]

3. Found a story in the Financial Times that, I think, is consistent with your take on China's trade

policy.

"Obama can help free trade with tariffs"

http://www.ft.com/cms/s/0/cc5a3610-9e3c-11de-b0aa-00144feabdc0.html

The orthodox free-trade view of most pundits holds that if Mr Obama accepts the recommendation he will fail the free-trade test. In fact, the truth is just the opposite. Not to accept the tariff recommendation would be a severe blow to open trade and globalisation as well as to America’s future economic health.

The conventional view is based on the notion that free trade is always a win-win proposition and that our trade with China fits the conditions of the traditional free-trade model. These include the assumptions that the markets are perfectly competitive, that exchange rates are not manipulated, that there are no economies of scale, that there is no cross-border investment or cross-border transfers of technology, and that there are no government subsidies or export requirements. If this were a true picture of our trade in tyres with China, then imposing tariffs would truly be harmfully protectionist and not be justified.

But this is not even close to the reality of our trade with China, which far from embracing orthodox free trade has openly adopted a neo-mercantilist, export-led economic growth strategy. China keeps its renminbi undervalued against the dollar in order indirectly to subsidise its exports. Foreign direct investment in China is often induced by the use of special, targeted tax and financial incentives. Foreign companies investing in China are often required to export the bulk of their production as a condition of being allowed to enter the Chinese market. This is the case with Cooper Tires, which agreed to export 100 per cent of its production in return for being allowed to invest in a Chinese tyre factory. The tyre industry is characterised by enormous economies of scale and imperfectly competitive markets in which a few oligopolistic producers divide the market among themselves. It is Chinese industrial policies and not market forces that are currently determining the trade flows and the location of production and jobs to the detriment of the US tyre industry."

"This kind of trade is not win-win. Rather it is a classic zero-sum game. It is well-known to game theorists that in such situations a tit-for-tat response is the optimal strategy. Unilateral acquiescence to the aggressive initiatives of another player (the orthodox unilateral free-trade response) is a sure way to lose.

This kind of situation was anticipated when China negotiated its entry into the World Trade Organisation along with most-favoured-nation treatment from the US. These deals specifically called for tariffs on China’s exports if they surged in ways that disrupted US industries. Between 2004 and 2008, US imports of Chinese tyres rose 215 per cent while US production fell by nearly 27 per cent and 5,000 US tyre industry jobs were lost. The ITC says China is not engaging in standard free trade and that its actions meet the established criteria and justify imposition of tariffs under the agreed international rules. "

[FreakinDJ]

4. China engages in Unfair manipulative trade practices

Ultimately I beleive the Communist government of China is using the Chinese worker and Free World's economic system as an Economic weapon to achieve economic dominence. They have No Intention of maintaining any thing like an open free society or open markets to the rest of the world

World faces hi-tech crunch as China eyes ban on rare metal exports

Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.

A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

China mines over 95pc of the world’s rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6082464/World-faces-hi-tech-crunch-as-China-eyes-ban-on-rare-metal-exports.html