Friday, August 14, 2009

U.S.-China trade relations continue to be difficult

Rocky may be the best word to describe trade between the U.S. and China in 2009.  In the past week or so, I have blogged about a new World Trade Organization (WTO) complaint filed by China against the U.S. alleging an improper ban on the import of Chinese poultry products to the U.S. and about a decision of a WTO dispute resolution panel finding that China has violated WTO rules by favoring certain domestic entities over foreign persons in the importation and distribution of certain publications and audiovisual products.  In addition to these WTO actions, the U.S. Commerce Department and the U.S. International Trade Commission (ITC) have been responding to a number of complaints by U.S. industries that Chinese products are being "dumped" (sold at less than fair market value) in the U.S. market.  Anti-dumping investigations and orders are ongoing with respect to several Chinese products, including wooden bedroom furniture, textiles, steel pipes and tubes, paper, magnets, and industrial chemicals, among others.  In July, Commerce decided to impose antidumping and countervailing (anti-subsidy) duties on kitchen shelving from China.  The ITC is expected to issue its corresponding final decision with respect to domestic injury on August 18.  In response to a complaint brought by the United Steelworkers union, the ITC ruled in June that increased tires from China were causing injury to the domestic market.  The U.S. government is weighing what action to take.  In response, the Chinese trade officials claim that the United States' actions are protectionist and that U.S. automakers are trying to blame China for the financial problems suffered by the industry.  The tension between the U.S. and China is probably inevitable in these difficult economic times.  However, given that these two countries represent two of the largest markets and trading partners in the world, it is hoped that they will be able to negotiate mutally satisfactory resolutions to these disputes and not engage in escalating trade wars.


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