Tariffs: Other Industries May Line Up for Sanctions Against China

Now that President Obama has signalled his willingness to punish the Chinese for dumping on tires, a whole host of other industries are likely to file their own ‘copy-cat’ complaints.

Reuters sayst.gif:

President Barack Obamat.gif’s decision to restrict tire imports from China after union workers complained of a surge could lead to copycat cases in areas such as steel, clothing, paper, machinery and consumer goods, trade experts said on Monday

“It’s a target-rich environment,” said Lewis Leibowitz, a lawyer who represents the Consuming Industries Trade Action Coalition, which opposed relief in the tires case.

“There’s almost anything you can hit. And even within import categories that have gone down, there may be smaller product categories that have gone up,” Leibowitz said.

However, the question of which industries could qualify for relief is complicated by the fact that overall U.S. imports from China have fallen in 2009 because of the global and U.S. economic downturn, he said.

Obama’s decision late Friday to restrict the tire imports was the first time the United States had used a special import safeguard provision against China known as Section 421.

It triggered an angry response China, which said it planned to challenge the action at the World Trade Organization and begin new anti-dumping investigations against U.S. products.

Beijing agreed to the anti-surge measure when it joined the World Trade Organization in 2001 and former President Bill Clinton’s administration relieved heavily on that commitment to help persuade a reluctant Congress to approve the pact.

Given that the WTO ruled against China on tires, it stands to reason that some grievances in other industries filed in the WTO against the Chinese would also likely be successful.  How can the President not slap tariffs on these products as well, given his actions in this first test case?  Clearly, what works for tires should also work in steel, clothing, paper, and elsewhere. If I were an American exporter in any of these industries, I would be lawyering up right now.

My hope is that we can get a comprehensive and equitable bilateral trade resolution with China to avoid more tariffs on either side.


Originally published at Credit Writedowns and reproduced here with the author’s permission.