WTO Rules Against China on Tire Tariffs, China Currency Manipulation Amendment to Senate Tax Bill Introduced

The WTO has ruled against China and in favor for the United States on Chinese tire import tariffs.


World Trade Organization judges rejected China’s complaint that U.S. tariffs on Chinese car and light-truck tires violate global trade rules, saying the Obama administration “did not fail to comply with its obligations.”

President Barack Obama announced the three-year duties on $1.8 billion of tires from China in September 2009, acting on a complaint by the United Steelworkers union, which represents 15,000 employees at 13 tire plants in the U.S. The union said Chinese tire exports to the U.S. tripled from 2001 to 2004 to 41 million and called for a cap on annual imports of 21 million.

China screamed protectionist, which the WTO rejected. The tariff schedule for Chinese tires was 1st year: 35%, 2nd: 30%, then 25%. This is a huge deal, a major victory because the WTO allowed tariffs as a trade remedy. It's also important that just because someone name calls something protectionist, does not make it illegal under the WTO.

Meanwhile Indian imported steel pipe is being dug up because it's defective and Senators Sherrod Brown and Olympia Snowe have introduced an amendment to put tariffs on China for currency manipulation.

U.S. Senators Sherrod Brown (D-OH) and Olympia J. Snowe (R-ME) today filed the Currency Reform for Fair Trade Act as an amendment to pending tax legislation in order to address China’s unlawful practice of currency manipulation.

The legislation, which directs the U.S. Department of Commerce to treat currency undervaluation as a prohibited export subsidy, would ensure the government is equipped to respond on behalf of American workers and manufacturers by imposing countervailing duties on subsidized exports from countries like China. The bill, H.R. 2378, passed the House of Representatives on September 29th by a vote of 348-79.

You want to call your Senators to vote yes on this amendment. It could really help reduce the trade deficit with China and potentially create jobs. Considering the WTO ruling on tires, it sounds like it might have a chance holding up when challenged by China. Here's what the Alliance for American Manufacturing said about this amendment:

This legislation is the single most important step Congress could take to create jobs. The House has already passed strong bipartisan legislation to address China's deliberately undervalued currency. The Senate should act immediately to take the same step and send a message that America's manufacturers and their workers deserve a level playing field. Anything less will merely serve to continue the same job loss and rising trade deficits.

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