Tires drive wedge between China, U.S.

Scott Tong Sep 14, 2009

Tires drive wedge between China, U.S.

Scott Tong Sep 14, 2009

Editor’s Note: The original script has been edited to make clear the meaning of Professor Zhu Layne’s comment on trade-war talk between China and the United States, “If you break my house, I’m going to break your house.” She was describing the tone of the public dialogue. She does not advocate protectionist measures.


Kai Ryssdal: Anytime the White House releases information at 9:15 on a Friday night, it’s a pretty safe bet they’d just as soon nobody noticed. Unfortunately for the Obama administration, no such luck. The White House said Friday it’s raising import duties on Chinese tires: 35 percent for the first of three years worth of higher tarrifs.

Them’s fighting words in the world of international trade. And Marketplace’s Scott Tong reports from Shanghai, the Chinese government was working overtime on its response this weekend.

SCOTT TONG: China calls the U.S. tariffs “grave protectionism.” And in addition to challenging Washington at the WTO, it’s exploring duties against American goods.

But it’s not just what Beijing is saying and doing, it’s the speed of the reaction. The news from Washington came late Friday night; Beijing responded Sunday.

Lester Ross is with the law firm Wilmer Hale in Beijing.

LESTER Ross: It says it was well prepared well in advance. And intended to deliver a very strong message. Because Chinese bureaucracies, like those elsewhere in the world, generally don’t operate on the weekend.

In apparent retaliation, Beijing singled out the U.S. auto sector, which is highly visible. And American poultry, which is highly lucrative.

Chinese restaurants pay big money for fresh chicken feet shipped in from the States. And then there’s the business of China holding a trillion dollars of American debt.

Wu Xinbo is with Fudan University in Shanghai.

Wu Xinbo: So, if you want China to cooperate on a financial front, not a good time to launch a possible trade war with China.

Wu says Beijing has to talk tough. China fears other American industries, like textile makers, could also go to Washington and ask for trade protection.

But not everyone thinks China wants an actual trade war, since exports are key to its economy.

Publicly, though, the message is vitriolic. International trade professor Zhu Lanye describes the environment.

Zhu Lanye: If you break my house, I’m going to break your house.

Trade war or not, the key players will confront each other in Pittsburgh next week. President Hu Jintao meets President Obama at the G20 summit.

In Shanghai, I’m Scott Tong for Marketplace.

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