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China Follow-Up- Calls to WTO for Talks
You saw this one coming loud and clear- China is pissed, and they're running to the World Trade Organization screaming foul play on Washingtons' steep tire tariffs.
"The American side's imposition of protective measures on Chinese tires violates WTO regulations," quotes Commerce Ministry spokesman Yao Jian in a statement. Beijing is exercising its rights as a WTO member to demand talks to settled the dispute.
China also noted on Sunday it is launching antidumping investigations into imported U.S. auto and chicken products.
This is going to be "tit for tat" or "chicken tit (read "breast") for tire" for a while to come.
I guarantee it.
Now let's all brace ourselves for Obama's lunch-time visit to Wall Street- touting increased government regulation and reform.
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1933. nuff said
You and others are over-reacting. Tires are small potatos. Obama imposing tarriffs on tires is like Bush 43 imposing tarrifs on steel. Both were just doing some horsetrading to get political support to advance other goals. In Obama's case, he needs to buy votes to get more support for health care, in terms of placating progressives that want a public option, which Obama will probably need to sacrifice to get a health care bill.
The Chinese are big on talking tough over little things to save face. But as long as they think Obama is pro-free trade and just trying to buy some votes as a one-off thing, protectionism isn't really going any where. Except in fantasies of guys like Pete Morici.
don't you think you're bit oversimplifying the whole protectionism. If this move really manages to create a few new jobs in that particular industry and improved the general picture of that industry's workforce, what makes you think other industrial workers wont demand the same treatment of their industries ? This is a dangerous game; today sub-prime tyres, tomorrow textile and who knows what. There is a reason protectionism doesn't work and will never work. Oh, and IMHO its a bad thing when you piss off the nation which holds 2 trillion of your worthless paper. Also, forget not the statements made by Chinese bankers from Saturday till today. You can find them all over the web and linked here on ZH.
Easy to see how this could snowball into financial MAD.
tOO much of a conspiracy mindset ; allows the real One to slip by.
Tire Tariffs = Trial Balloon (whether intended or not)
At the current stage this is not a reason for grave concern but trade wars are the results of the snowball effect, and the reason why Obama signed off on the tariff is not as important as the response it elicits from our Asian trading partner.
Well, I'd be pretty mad too if I was told I was going to get hit with a 35% markup on my products. Let the new age of protectionism begin!
Perhaps all Wall Street Financial Products could be hit with 100% anti-dumping charges by China. I'm sure there are Chinese bankers who are trying to compete with fatally dangerous US Financial Products who can't due to Wall Street dumping them. Heh.
I think we should keep the tarrif for at least one year or, until China can ship products to us that are not poisonous.
i'm one of the non-finance guys who's been here from back in the blogspot days.
I still can't participate in conversations about vwaps or yield curves, but am pretty sure that any ninth grader can opine on the stupidity of tarriffs.
so folks, could someone (preferably not one of the resident wingnuts) give us any insight into what is going on with these tarriffs because it just can't possibly be that this is a naked gift to teh unions...
.....there is an elaborate and escalating chess game going on. we can guess and opine about the strategies being deployed by the players and certainly some guesses will be correct. the problem is that the players don't know the outcome and the risk is for mr. unintended consequences to rule the day.
We can at least discuss the parameters we do know... and I'd say firing up the printing presses is not only a shot across the bow, but a few salvos aimed at the command deck.
We also know that china has begun (continued) stockpiling inputs with no demand/commodities, including but not limited to gold.
Is this move a flexing of the nonexistent american consumer's muscle by the government? e.g., "China, you so crazy, you know you need us to buy that crap. And given you're very well positioned to be low cost leader on goods and services (minus further currency debasement), here's a big fat one to think about." If so, it would seem that china has already retorted with various salvos of their own, namely their hedging against dollar depreciation...
I think the "chess game" has been pretty well outlined by ZH... we're going to default on our obligations through inflation and they're mad as hell and not going to take it anymore. They don't believe in our fiat currency and have made the ultimate vote of no confidence, taking possession of commodities. All we can do now is mitigate their ascent with threats, protectionism, and printing faster than they can dump/convert and keeping our own commodities (since they actually have value). I also suspect that our newly found control over strategic pipelines will essentially act as an American implanted Chinese Fed. You wanna laugh at our stagflation, here's some of your own.
I suspect the chess game will come down to oil (again)... and we're well ahead of the curve in that department... should push come to shove.
Empirical formulations in the feed stock chemical sector's. Lean manufacturing has 5 levels of viability in current business models. Many are crucial to other segements in the supply chain universe. Some of us have been around numerous decades and see where it all goes.
http://www.youtube.com/watch?v=00x561m93lU&feature=related
Don't think the US can afford to push to many buttons on the the Chinese "You're pissing us off" panel.
Something fishy about this trade war business. I don't believe it. It's got to be a smoke screen for something else lying under the surface. No way the U.S. is that stupid.
I think its part drumming up support for Obama's health care proposal (as posted above), as well as lending support to their fellow Democrats for the 2010 congressional election. There will probably be more protectionist measure until the end of the congressional election, which will produce "new" trade agreements with China for about a year, until the next protectionist stance for the 2012 federal election.
They did it assuming that China wouldn't react. Its very short term thinking. Because China exports $4 for every $1 American imports, they assumed that they could get away with it as long as its in China's favor. However, everyone knows that the dollar is being trashed by the Feds and its value is decreasing. The main problem is that it is a challenge to China's political ambitions. China sees itself as a great power and want a piece of the international pie. It is a matter of prestige. This goes beyond trade. If you look at them unveiling new weapons on Oct. 1, it matches with current events. They are trying to show that they are a rising power and people have to take them seriously. They didn't react with the steel pipes, but if the WTO action fails, there would probably be consequences against Chicken products.
Oh I think they really could be that stupid.
2nd that, and I'll have another. What the hell, keep 'em comin'.
Timmay and Obama-san is messing the Duke!
NOBODY MESSES WITH THE DUKE!
Obama did it to benefit a union. The union asked him to do it. That is documented, they complained and he responded.
China was fully and totally prepared to respond same day. It did not take them by surprise. So clearly they probably had talked about this sort of thing before with the white house or at the very least knew it was coming.
The proof will be in the pudding. If lots of tarriffs start flying than they wanted this trade war.
Clearly it would help Obama politically amoung his union supporters to answer all their complaints about Chinese competition.
Hopefully the conspiracy here will not be to avoid the facts and try to find non-existent red herrings. Obama is helping his union at the expense, and in violation of, the Free Trade Agreement.