The Economic Advisor

Tiring of Trade Wars and Chickening of Chinese Disputes on Dumping

Apparently, the United States and China are on the verge of reciprocal trade war tariffs. The United States is accused of starting the trade war by putting the tariff on imported Chinese tires. Many think tanks in the United States believe that this was a political move by The Obama Administration on behalf of the steel workers union, which also involves the rubber industry.

If you will recall, The Bush Administration also tried a similar tariff on imported steel several years back; a move, which was highly criticized by free-market economists, but was also obviously a political move as well. Japan as you will recall was upset with the Bush Administration and there was a world-wide consolidation of steel companies, as well as a ripple effect in nearly every industry that used steel, from automobiles to appliances; meaning higher prices for consumers.

This latest tariff on tires has caused quite a stir, now China has responded and is considering reducing the number of US grown frozen chickens entering the country. China is accusing US chicken growers of dumping.

Whereas, US chicken corporations do have significant pollution, and therefore, could be said to be subsidized by the federal government EPA Superfund sites, the Chinese might have a claim there, and the WTO or World Trade Organization will hear the rest of the complaint soon.

Indeed, according to Industry Week; “China said Sunday it had grounds to start a formal anti-dumping and anti-subsidy investigation into American chicken meat imports, as tensions persist following President Hu Jintao’s visit to the U.S. The United States is the largest chicken products exporter to China, comprising 90% of the 407,000 tons of chicken China imported in the first half of 2009, according to the official Xinhua news agency”

What is completely unfortunate is that, what started out as a domestic political vote grabbing move to appease unions, and get them to go along with President Obama’s health care bill could very well turn into a huge trade dispute, and touch off a worldwide trade war that could involve all the exports and imports in the United States, and around the world in many other large nations. Luckily for the USA, Brazil also placed a similar tariff on Chinese Tires, so the US doesn’t look as bad as they might have. Please consider all this.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes if you have diabetes that you must learn all you can; diabetes news.

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