Commentary: Tyre case tarnishes US image

(Xinhua)
Updated: 2009-09-13 22:19

BEIJING: US President Barack Obama shocked the world on the weekend by deciding to impose punitive tariffs on tyres imported from China.

The world was shocked because people had generally expected Obama to reject the tariff petition which bears clear trade protectionism color. Officials and experts from China, international organizations and even the United States have all warned that such an action would hurt not only China, but also the US itself and even the world economy.

The decision was disappointing because it had been widely understood that it would have a fatal impact on the world trade environment. The global free trade progress, of which the United States used to be a leading promoter, will undoubtedly suffer a serious setback.

When the US decision takes effect on September 26, car and light truck tyres imported from China will suffer punitive tariffs of 35 percent, 30 percent and 25 percent in the coming three years, respectively.

Experts analyzed that under the new tariffs, some 100,000 Chinese workers would lose their jobs and the country's tyre industry might suffer a loss of 1 billion US dollars in export.

It would not save jobs in the United States either. On the contrary, some 100,000 tyre-related jobs in the United States could be affected, including such sectors as imports, distribution and retail. Further more, US consumers would have to pay more to buy tyres at a time when their purses are much thinner as a result of the economic downturn.

Media reports say that Obama obeyed to the Steelworkers' union, the filer of the petition to raise tyre tariffs, because he desperately needed to win domestic support to walk out of the current difficult time in pushing forward new policies. Whether he will be able to reach that goal is uncertain, but the US image as a free trade leader has undoubtedly been tarnished.

By giving green light to the petition, Obama is eating his own words as well. China's Minister of Commerce Chen Deming said in an interview with Xinhua that the US government's decision failed to honor its commitment made on the G-20 financial summit.

The Associated Press (AP) reported Saturday that Obama has spoken out strongly against protectionism and other countries will view his decision on tyres as a test of that stance. This is not the first time that the United States uses trade restrictive measures as a weapon for political or other purposes, especially after the outbreak of the financial crisis. Over the past few years the United States has launched series of trade protectionist actions in names of anti-dumping, quality standards or safety factors, and China has been the top target of these actions.

Official figures show that China and the United States are both the second-largest trading partners to each other, China treasures its trade relations with the United States, but it would not keep silent when the US side violates World Trade Organization (WTO) and other related rules.

Minister Chen has said that China reserves the right to bring the case to the WTO. Five Chinese industrial associations, led by the China Rubber Industry Association, have sent a protesting letter to Obama and strongly recommended that the Chinese government adopt retaliation measures.

China's August statistics released last Friday show that its economy is recovering steadily, and the whole world is pinning hope on China to help push up the world economy. It should be noted that China has made its greatest efforts to restructure its economy by tapping domestic market potentials. When its export keeps on falling month by month since mid-2008, it is still expected to reach an 8-percent economic growth in 2009, thanks to government's stimulus measures and rising domestic consumption.

That is the hope for the Chinese economy, and for the world economy as well. But if the US tariff action sets off chain reactions, that hope would be damaged, and the revival of the world economy would be slowed.