USA and China Trade Tensions

                      First of all let’s be clear about one thing; imposing a tariff as part of a protectionist measure never works. A protectionist policy from one country always triggers a reaction from the other country.  

                     In early2009 President Obama imposed a tariff for the import of Chinese tires of about 35 percent. The tariff’s ultimate goal was to even the playing field for American producers of tires because at the time it was perceived that China was disrupting the 1.7 $ billion market. The tire industry was dead set against the measure arguing that tire-producing companies in China will just move their companies to lower-wage-paying countries. As a response, China began imposing their own tariff on chicken feet of 43 percent to 105 percent. China argued that the United States was dumping their chicken feet in the Chinese market and that chicken feet were selling for less in China that what they worth in the United States. It goes without saying that the tariff imposed by the United States did not produce the results expected. In the end, American companies producing chicken feet stood to lose revenue because there was no other market for their product.

                  If China and the United States continue this way they will end up hurting each other. The political season in the United States is in full swing; both Romney and Obama are trying to be perceived as being the tough guy on China. Unfortunately, more than ever, the United States and China need each other to survive. China needs the United States to buy its products and the United States needs China to lend them money. Although China bashing is very popular in Washington and in the media, we should never forget that the Great Depression of the 1930s was created because of trade wars. Going down that path is very dangerous for both countries and for the rest of the world. 

                Both China and the United States need to come to a fair conclusion of who they are and where they stand. Both countries need to play by the rules. China needs to let its currency appreciate; which in their defense has been appreciating in the last seven years; and the United States needs to stop blaming China for everything that is wrong with the economy.  

 

Works Cited 

Ramzy, Austin, and Beijing. "Chicken Feet: A Symbol of U.S.-China Tension." Time. Time, 08 Feb. 2010. Web. 30 Sept. 2012.

http://www.time.com/time/world/article/0,8599,1960825,00.html.

 

Andrews, Edmund L. "U.S. Will Add Tariffs on Tires Made in China." The New York Times. The New York Times, 12 Sept. 2009. Web. 30 Sept. 2012. <http://www.nytimes.com/2009/09/12/business/global/12tires.html>.