How to look at China and the United States tire "special protection case"

The U.S. International Trade Commission proposed on June 29th to impose 55%, 45%, and 35% special ad valorem tariffs on China's passenger-car and light-truck tires for three consecutive years on the grounds that imports of Chinese tires have harmed the United States. The interests of tire workers, the US International Trade Commission believes that in 2004 and 2008, the number of tires imported from China increased significantly by 215%, the United States domestic tire market share fell by 14.3 percentage points, employment decreased by nearly 10%. According to the procedure, the United States The President will make a final decision on whether to take measures by September 17. As the case was the first major US-China anti-dumping case faced by the new US government, the US$2.2 billion Sino-U.S. tire “surveillance” has continued to heat up over a month.

As we all know, the United States' original car tire market is exclusive, and American factory tires are mainly equipped for new cars. The tire accessories market is fiercely competitive. Tires are consumables. The tires that are replaced by American auto consumers are generally produced in Chinese factories because Chinese tires are only half the price of American tires and are attractive to consumers. . At the same time, as American tire manufacturers adopted a product upgrade strategy, they abandoned the profitable low-end tire market. The Chinese tires exported to the United States are mainly low-end products, and are mostly produced by U.S. companies.

The reasons for the sharp decrease in employment in the automotive and parts industries that the US International Trade Commission has identified are very simple. That is, car sales caused by the financial crisis and economic recession have been greatly reduced. In 2008, the number of passenger cars and light trucks sold in the United States was approximately 13 million vehicles, a decrease of 23% over the previous year's approximately 17 million. It is worth noting that the situation in 2009 was even worse. In July 2009, the sales of automobiles were 5,867,600, which was 32.1% lower than the 8.854 million in the same period of last year. In July, the number of people employed in the automobile and parts manufacturing industry decreased drastically by 232,200, a decrease of 26.0%, and the entire manufacturing sector was also employed in the same period. A decrease of 12.2%. On August 10th, the 2009 report of the American Tire Manufacturers Association pointed out that in 2009, the output of passenger vehicle replacement tires will decrease by 9% (or 18 million) to 176 million; the replacement of tires by light trucks It will drop 18% to 24 million. In 2010, it will increase by 3% and 8% respectively. The report boils down to four reasons: sharp drop in car sales, low consumer confidence, high unemployment and a depressed housing market. The report did not indicate that the decline in production was affected by imported tires from China.

On July 21, the US Tire Free Trade Alliance, which consists of six tire importers from the United States, sent a letter to Kirk, a US trade representative, and also explicitly opposed the use of special insurance. The alliance pointed out that the implementation of special insurance will seriously damage the interests of US tire distributors and retailers. It is estimated that once the measures are taken, nearly 250,000 people in the distribution and retail sectors will be unemployed. In addition, the relief measures will lead to US consumers spending an additional 600 million to 700 million U.S. dollars each year. On July 27, the U.S. Automobile Trade Policy Council representing the interests of the three U.S. automobile giants, Chrysler, Ford, and GM, and the U.S. Retail Leaders Association representing the interests of the largest retailers, product manufacturers, and service providers in the U.S. Letter to US Trade Representative Kirk opposed to taking special protection.

It is normal for China and the United States, which are the second largest trading partners, to have some trade disputes and frictions. However, frequent trade restrictions are not only detrimental to Chinese companies, but in the end it will hurt the US economy itself. Under the shadow of trade protection, China's low-cost products can easily be capped with hats that threaten local industries, and then evolve into Chinese exports that threaten local employment. In fact, under the “low-cost” cloak is “trade conflicts triggered by industrial structure.” Under the current industrial structure, products that China can produce are of high price competitiveness, but There is no technological advantage or irreplaceable advantage, so it is easy to reach overseas trade barriers. This time, the Chinese tires that are considered by the United States to “grab the American workers’ jobs” are actually completely “weak”. At present, China's tire export products are mostly low-end products, and China's domestic tire market is actually in the majority occupied by foreign capital. While increasing technical barriers in the United States and the EU’s two largest tire export regions in recent years, China has also continued to liberalize access to foreign investment in the tire industry. While the international and domestic high-end tire markets have been monopolized by large multinational tire companies, Hundreds of Chinese tire companies, which mainly produce low-end products, have fallen into the edge of the survival crisis of "internal and external attacks."

At present, many of China’s important export products are labor-intensive products and are related to the employment of workers in many countries. Therefore, in the context of the financial crisis, the world economy is in a difficult situation, and the life of foreign counterparts is difficult. We hope to be able to Take measures to curb the rise in the unemployment rate, so it is bound to take a labor-intensive product, which caused a lot of trade friction. To deal with these trade frictions, on the one hand, Western countries, especially the United States, should liberalize high-tech export restrictions to expand exports to China in order to balance the trade deficit. On the other hand, speed up domestic industrial restructuring. This is not only a need for exports, but also a necessity for China to move from a big economy to a strong country. This year, the Chinese authorities repeatedly pointed out that the financial crisis was used to upgrade the industrial structure. Only in this way can we solve the trade frictions caused by the global financial crisis and reduce the impact of the sudden drop of exports on the Chinese economy.

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