Jackson Jambalaya

I have to agree with you here. Sticking it to the Chinese is not a good thing. The issue, in my mind, is what is to balance the corporate mentality of the "Chinese Strategy" that corporations have adopted? They want to produce cheap goods AND they want access to the Chinese consumer. Do we have access to the Chinese Consumer?

trade issues are complicated and aren't usually done in a vacuum. hopefully, their was some negotiations relating to this move. If there was any lesson learned from the great depression, it is that protectionism can have destructive consequences.

Tires??? How about dry wall?

And I have to ask, why target unions in the header and Obama in the article? KF as previous poster has claimed, this is an immensely complicated issue. This is not a legal issue standing on its own, it has tremendous economic issues that you over simplify. I mean, do you shop at Wally World? Do you know how to unwind your Mutual Fund investments to the point of only favoring free-trade companies? I know this will be lost in the comments, but I really think this attempt is a broad brush stroke.

Then stop reading the blog asshole.

I seem to have struck a nerve.

Financial Times


US tyre duties spark China clash
By Geoff Dyer in Beijing and Tom Braithwaite in Washington

Published: September 13 2009 06:53 | Last updated: September 14 2009 11:57




A full-blown trade row erupted between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles.

Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.

In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.

Chen Deming, China’s minister of commerce, condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades.

“This is a grave act of trade protectionism,” Mr Chen said in a statement. “Not only does it violate WTO rules, it contravenes commitments the US government made at the [April] G20 financial summit.”

Beijing said it had requested WTO-sanctioned consultations with the US over Washington’s new duties on tyres. Yao Jian, a commerce ministry spokesman, said the duties were in ”violation of WTO rules”.

China said it would now investigate imports of US poultry and vehicles, responding to complaints from domestic companies.

The US earlier warned Beijing against taking retaliatory action. “Retaliation would be inappropriate, as the United States acted entirely within the bounds of trade laws and within the safeguard provision that China itself agreed to upon accession to the World Trade Organisation,” said an official from the Office of the United States Trade Representative.

US officials said they were scrutinising the export of poultry and vehicles, but said any action in retaliation by China could result in a complaint by the US to the WTO.

Key Tokyo rubber futures tumbled more than 9 per cent to a three-week low on Monday, according to Reuters. News of the additional duties on US tyre imports from China combined with sharply lower oil prices and a stronger yen to push Tokyo rubber futures prices below Y200 a kilogramme.

The dispute comes less than a fortnight before Mr Obama is due to host world leaders at a summit of G20 nations in Pittsburgh and ahead of his planned visit to China in November.

The decision to impose extra tyre tariffs followed a petition by the United Steelworkers union, which represents workers at many US tyre factories. Official US figures show an increase in imports by volume from 14.6m tyres in 2004 to 46m in 2008. The US data shows that the value of tyre imports from China increased from $453.3m in 2004 to $1.8bn in 2008. Four US plants closed in 2006 and 2007 and three more are likely to be closed this year. US production capacity has fallen by 17.8 per cent in the past four years, according to the official data.

Eswar Prasad, professor of trade economics at Cornell University, warned that the disagreement could escalate. “These protectionist measures, some of which amount to domestic political posturing rather than substantive restraints on trade, could easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries,” he said.

Can you learn to post a damn link? Where is JDBerry now and those fair use sensitivities.

That " not sticking it to the Chinese" is risky is a bigger problem since they don't allow our goods to freely compete.

Unions have gotten out of control but they wouldn't have come into existence if workers had been treated fairly.

This isnt' about party politics or unions vs management.

This is just one of the many problems that arise when leaders of a group enjoy power and use it arrogantly.

And, we argue about which group is more deserving of power than about how power is misused.

Protectism is bad. Trade balance is good. A discussion of which this is would be important, but characterizing it in a partisan way rather than giving reasons about why it should be defined as one or the other doesn't help me.

But, in bringing it, I can go gather information and decide if it's a tempest in a teapot, a serious threat to international relations,and/or economically sound on my own.

Before we get TOO partisan, it was Nixon and Bush I that had the most to do with establishing an economic relationship with China.

I'm just surprised that after the last 50 years with either party in power, anyone can still be loyal to one of the parties as they've both rather royally screwed over us.

Some of you are missing the point. All of the deficit spending you want is financed by the selling of treasuries. The Chinese are the biggest buyer of these securities. They don't buy them, price falls and yields shoot up.

SO what this little favor for his union friends does is antagonize the one party he needs the most to buy our treasuries. Unfortunately for Obama, he needs the Chinese more than they need him and if they start putting their money elsewhere, he is goign to start finding his spending options limited. Hey, wait a second. Enforce some more tariffs.

A discussion of which this is would be important, but characterizing it in a partisan way rather than giving reasons about why it should be defined as one or the other doesn't help me.

Great. It doesn't help you. Who fucking cares? Your damn sermons are a bore.

Who is this foul-mouthed poster that has shown up recently?

When did the Republican Party decide it was in favor of transforming the United States into a satrapy of the Chinese government? So it's "socialism" if we try to save people who are dying and don't have insurance, but it's not "socialism" to submit to every whim of the largest unapologetically socialist government on Earth?

Who do you think is going to finance your so-called health care reform?

The Chinese. Try again.

KF the purchasing of our treasuries was not lost on me. I guess, given the current crisis (i.e. they own a chunk of our debt) and the trade imbalance, we ought to rightly consider what allowed them to be able to purchase those securities? One could argue it was our own arrogance in believing the market would go up forever, that economic growth was a given. Or, on the other side, as we continued to invest in our economy to overcome the tremendous loss of manufacturing to China, we found ourselves unable to fulfill the promise of China - access to the largest consumer market on the planet. IOW, perhaps this is Obama's shot across the bow to say, "lets open up your markets, NOW."

Glad you posted this, I didn't see much about it on CNBC this AM.

Association is not causation 8:57.

Socialism

n.

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.
2. The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved.

Main story on CNBC's website.

Or, on the other side, as we continued to invest in our economy to overcome the tremendous loss of manufacturing to China, we found ourselves unable to fulfill the promise of China - access to the largest consumer market on the planet. IOW, perhaps this is Obama's shot across the bow to say, "lets open up your markets, NOW."

WOW. I don't believe it is but if this is a shot across the Chinese bow Uncle Barack has oddly decided to go to battle using little more than a trade pea shooter. In the grand scheme of our trade imbalance with China their tires are hardly the "trade hill" to die on.

This is a political stunt to shore up Obama's flank no different than when Bush jacked around (up) steel tariffs in 2002 in advance of the mid-terms. If you'll recall he lowered the steel tariffs in late '03 claiming victory for the effort. Yeah, right.

Kingfish has cut the core ... it is not smart business to tell your main banker -- who is already questioning your resolve to protect the value of their investments -- to pound sand.

We now break for breaking news...

http://bit.ly/2WVmkw

We promptly return to your regularly scheduled discussion....

That is funny. Thanks!

I'm sure you'll never see NMC or Jim Craig or the JFP or the Clarion-Liberal report on this.

A union official backed away Friday from an analogy in an e-mail in which he had linked Volkswagen's Nazi past to the use of Hispanic workers building the automaker's Chattanooga plant.

In the words of Tom Owens, director of communications for the AFL-CIO's Building and Construction Trades Department in Washington, D.C.

When It Comes to Volkswagen...Some Things Don't Change
The origins of Volkswagen are rooted in the Third Reich of
Adolf Hitler. The entire idea of VW was conceived by Hitler
and its founder, Ferdinand Porsche, who placed VW at the
service of the Nazi war machine. Porsche's SS friend, Fritz
Sauckel, responsible for the mass deportation of workers,
summed up VW's needs in his first directive on labour:
"Foreign workers will be treated so as to exploit them to the
greatest possible extent, with a minimum of outlay." To the
arsenal of convetnional methods utilized to maximize
productivity (e.g. longer working hours and a faster rate of
work) VW and the Nazi war machine added slavery.
Fast forward to 2009, and we see VW coming to the state of
Tennessee whose businesses and workforce are suffering
through the most severe economic downturn in a generation.
And what do they do? They resort back to their dark past by
making use of, and exploiting, a predominantly foreign
workforce that eyewitnesses on the jobsite say is 80% non-
English speaking Latino.

OH...I'm such a sermonizing conservatve ( as opposed to party puppet) that I thought selling out to a COMMUNIST country was a bad idea to start! AND, I didn't miss that Nixon and Bush courted the Chinese! Believing,or so the theory goes, that if we turn them into capitalists, the boys in power will somehow start loving freedom.

But, KF is right, they own our behinds now.

I just don't think rolling over every time they tell us to "roll over" is necessary.

And,selling out one more thing doesn't seem all that advantageous to me

How about 3 billion? A day.

It's not in your banker's interest to have you go bankrupt. He'd rather keep getting his interest money. If you can't liquidate assets to satisfy your debt, he's not likely to be able to either.

If we keep losing jobs to China, how is it we'll be able to pay them back?

If our farmer's go under how will we feed ourselves?

http://globaleconomicanalysis.blogspot.com/2009/09/outsourcing-unemployment-to-china.html

I recommend this from MISH. Pretty eye opening.

What exactly does everyone think collection on our debt would be like?

Big deficits and a nation going bankrupt aren't new events in world history.

The Chinese have to use their army to control their own population so I'm not foreseeing them be able to send sufficient troops to control ours nor see Americans not engaging in guerilla war were they to try.

I suspect the Chinese believe correctly that they've already gotten a pretty good "return" on their " investment".

They've gotten to be the new Super Power without firing a shot.

The Chinese won't have to invade to collect on the money we owe them. We'll self-destruct. The Chinese will have free reign to exploit Taiwan, Japan, South Korea and the Philippines as they see fit regardless of what we think or say.

Our economy as we know it will cease to exist because once we default we'll no longer have access to any low interest credit and, in many cases, to any new credit at all. It will be a massive destruction of wealth and it will happen very quickly. The Fed will flood the country with worthless new paper and the banks will limit the amount of cash that can be withdrawn daily. Fuel shortages, bread lines, power outages ... we'll have it all.

9:36 you describe the worst case scenario well.

That's exactly what I meant by " a good return"...the power to control our economy and global political clout.

The first question becomes whether or not and under what circumstances the Chinese will decide if it's in their interest to pull the worst case trigger and if there are measures we can take to keep that from being an attractive option.

The second question is whether or not patriotism will trump greed in this country.

I just disagree with KF that tires would be the trigger as I think we still have stuff they want...they aren't done raiding the store. I,also, think they like us dealing with terrorism. The Chinese are good at taking a very long range view and for the terrorist to be successful is not in their long term interest. They are "infidels" as well. And, while we do still have reasons for them not to want us to go bankrupt , we'd best try to take any small measure we can to start to turn this around.

I suspect the Chinese and terrorists are just enjoying watching us fight among ourselves. As long as we continue to do that,can't agree on anything, and are unable to unite in any common cause, we're pretty much screwed.

The War of the Roses ( either the movie or historical event) are US.

Drezner cautions that the bald Obama politicization of trade policy may be little more than a down payment to the unions.