On Friday, September, 11th, US President Barack Obama approved a higher tariff against Chinese car and light truck tires. The tariff, currently 4%, will jump to 35%. Next year, it will decrease to 30%, and 25% the year after that. The US International Trade Commission had originally recommended starting the tariff at 50%. The higher import tax is an attempt to stem the hemorrhage of American manufacturing jobs and was backed heavily by America’s labor unions – influential players in Obama’s election bid. China struck back by accusing the US of protectionism and filing a complaint with the WTO. According to WTO rules, the two parties have 60 days to negotiate the dispute. If they fail to reach an agreement, China can ask the WTO to investigate the case and rule on the legality of the US move. China has launched its own investigation into anti-competitive practices on the part of American companies exporting chicken products. America exports 700 million USD worth of chicken to China every year, half of which is chicken feet. Is this a smart move to save American jobs or an act of protectionism? A shrewd economic decision on Obama’s part or just a move to repay supporters? Will it lead to an all out trade war or blow over quickly? As always, when faced with a difficult question, we asked you:

How big a mistake is the United States making by imposing a tariff on Chinese tires?

Photo: Manky Maxblack

Perspectives seeks to promote dialogue and cross-cultural understanding by featuring Chinese and foreign responses to a single question. Email us to be added to our weekly question mailing list or to suggest questions of your own and feel free to add your perspective in the comments section below.

In my opinion the US didn't make a mistake. They are just trying to do something about the job losses in their tire industry and if they think this way will work, then they have to try it. Like the articles states, nobody knows if this plan will succeed or not. I don't know how big the profit margin is on tires, imported from China, after subtracting tax, but if it’s high enough to outweigh the new tax tariff costs, then the Chinese tires will keep on rolling.
J / Netherlands

I've been following the case before President Obama made his decision. I don’t think he had a choice other than to put forward this punitive tariff – the Sino-US relation won't hit rock bottom after this but his legendary political image might suffer a major downfall if he fails to push through the healthcare project, which is pretty much at this point a call by groups like the Steelworkers' Union. Plus, I've read analysis to which I agree that upon the G20 conferences, China will not launch a deadly trade war against US – there will be hitbacks like the chicken meat probe, but that shall be as far as it goes I guess. After all, Obama did what he's gotta do, even if against his better judgment. Let's just call it politics.
I / China

This is a very complicated subject and since I’m not an expert I can’t really evaluate the situation.
X / China

Photo: Thirteen of Clubs

I don’t know what Obama thinks he’s doing or who advised him to make this decision. It’s hard to imagine people like Geithner or the new ambassador Huntsman backing this decision which makes it seem like he’s playing politics instead of making sound economic/political decisions. I understand the Steelworkers helped him get elected but I don’t know what they can really do for him now that would make this a worthwhile move.
S / US

The economy of the US seems still to be in terrible condition, but 35% is too much, Chinese should do something similar.
V / China

Another example of America being hypocrites. Everything is okay with them until they are on the losing end. America will have to learn what it’s like to be second best because nothing can stop China from overtaking them. The WTO will support China and punish America for its illegal actions.
Z / China

It’s about time countries started standing up to China, it’s only too bad that it took so long. China has been exporting cheap junk laced with chemicals and people in other countries keep buying them. It’s time governments started protecting their citizens and their jobs by raising tariffs, taking a stand, and starting to chip away at China’s political and economic dominance.
H / New Zealand

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Related Links

Meltdown 101: China-US trade spat and tire prices
U.S. Car Companies Nervous Over China's Anti-Dumping Probe
Why the U.S.-China Trade Spat Won't Escalate

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