USA and China “Trade War”

President Obama imposes additional 35 percent on Chinese made tires to support the U.S. tires industry. American market for Chinese tires between 2004 and 2008, the Chinese market share went up 16.7 percent from 4.7 percent. The Chinese tires were severely impacting the domestic tire market and this dispute aims to slow China’s rapid export growth and protect American jobs in the tire sector. By increasing the tariff rates, the American administration used safeguarding provision where government do not have to worry about country is competing unfairly however, only need to demonstrate that American producers have suffered.

In the U.S. Chicken feet usually end up being ground into parts for feed. However for China, they are delicacy and the Chinese consumer prefer the taste of meat in the bone. Due to Chinese poultry are not producing enough chicken to meet the market demand, the U.S. has been the source of about half of China’s import of feet. Since China is not happy with U.S. decision of imposing 35 percent tariff, Chinese minister announced imposing anti dumping tariff ranging from 43.1 percent to 105.4 percent on Chicken feet where Chinese administration claims that the American’s are dumping their products at cheaper rate than domestically. The U.S. exported $677 million worth of chicken to China where half of those exports were chicken feet, which worth $0.60 to $0.80 per pound on the Chinese market but just pennies in the U.S.

In my view, the trade war between U.S. and China, they both are protecting their domestic market. U.S. imposed tariff on Chinese tires to protect tire industry in their home country but what about the consumer? The most affected are the consumers, who will be forced to buy expensive tires, which will again create demand for cheap tires. Same goes to China, as Chinese administrators attacked the chicken industry of the U.S. which will not only affects U.S. poultry but also affects the Chinese food service industry. Where they have to import from other country and this will again lead to be more expensive as they wont be able to meet demand of the product.

Video Link
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Sources

http://www.nytimes.com/2010/01/12/business/global/12trade.html

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