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In the early hours of Beijing time yesterday morning, the U.S. Trade Representative Office (USTR) submitted the final proposal report on the Chinese special case for tire protection to U.S. President Barack Obama. According to the original arrangement, Obama will make final instructions between September 3 and September 17.
Deng Yaxi, vice president of the China Rubber Industry Association, said in an interview with this newspaper yesterday that “the specific plan is still a top secret document and it is expected to know the contents of the document within the week.â€
It is more likely that the special protection case will be vetoed
According to informed sources, Obama is more likely to veto the special security case. Earlier, there were also reports that, as the voice of internal opposition in the United States grew louder and louder, Obama was very likely to dismiss the U.S. Steel Workers Federation’s request for a tire special security case .
Xu Wenying, deputy secretary-general of the China Rubber Industry Association and an important negotiator for the two special hearings on the China and the United States tire protection case, disclosed to this reporter that Vice Minister of Commerce Zhong Shan and more than a dozen officials from the Ministry of Commerce and the President of the China Rubber Industry Association Fan Rende, secretary general of the Rubber Industry Association of China's Rubber Industry Association, Cai Weimin, went to the United States last weekend to make final mediation with USTR and other US related agencies. In addition, several Chinese lobby groups have been actively lobbying and trying to influence Obama’s decision at the last moment.
The person in charge of the Delicate Group stated that they had organized delegations with several other tire companies in the United States to attend the hearing in the United States. From the situation at that time, the views of the Chinese side were supported by the majority of American political circles.
According to the circumstances of the previous two hearings, people in the industry generally believe that Obama’s veto of sanctions is highly likely. Beijing-based medium-term futures analyst Yan Jin said, “Chinese tyres are mainly mid-to-lower tires, and they are used by American tire companies. With minimal impact, only the Steel Workers Association is required to sanction China in the United States."
Some brokerage industry analysts told reporters that the possibility of implementation of the special security case is not high, but the results have not yet come out, if the worst case appears, tire companies may be forced to carry out product restructuring or industrial transfer.
Once passed, it will harm multiple interests
The US Tire Free Trade Association estimates that once the special security case is implemented, nearly 25,000 people will be unemployed in the field of tire distribution and retail sales, which will seriously damage the interests of the US tire distributors and retailers.
The U.S. Retail Leaders Association, which represents the interests of the largest retailers, product manufacturers, and service providers in the United States, said that restricting tire imports during difficult economic times will lead consumers to spend an additional $600 million to $700 million each year. In order to save expenditure, it will give up or postpone the replacement of automobile tires, which will seriously threaten the personal safety of consumers.
"U.S. special insurance for Chinese tires not only hurts China, but also does no good for the U.S. economy." Zhang Jianping, director of the International Economic Cooperation Office of the National Development and Reform Commission's Institute of International Economics, believes that U.S. tire production costs are relatively high and are not competitive. If such temporary measures are taken to solve the employment pressure in the domestic tire industry and continue to invest in this uncompetitive industry, it will still require a lot of people to cooperate, which is not conducive to the allocation of resources and is not conducive to the health of its economic structure.
"From March to May of this year, China's tire exports to the United States dropped by 26%, 29% and 16% respectively year-on-year, and it is very likely that the first year of negative growth since the reform and opening up was achieved throughout the year." Deng Yaxi said, "If the special security case is passed, Chinese tires will have to exit the US market."
"More than 40% of tires produced by Chinese tire companies are exported, while those of U.S. tires account for more than 20% of total production." Deng Yaxi said, "If the special security case passes, Chinese tires will exit the US market. One hundred thousand industrial workers will be affected."
Some analysts worry that once Obama opens the "Pandora's box," Sino-US trade will add more variables in the future.
Since the financial crisis, new trade protectionism has been booming. Trade protection has become a trend due to the reduction in the number of orders and the decline in employment. Zhang Jianping said that the United States' investment in tires, which are not competitive domestic labor-intensive industries, is only a gesture that politically meets the people.
Prior to this, the Indian Ministry of Finance’s Bureau of Safeguards initiated an investigation into the special insurance for passenger car tires in China on May 18. The Brazilian Foreign Trade Commission directly announced on June 18 that it imposed anti-dumping duties on imported passenger and truck tires from China. , valid for up to 5 years.
In addition, according to the relevant rules of the WTO, if Obama approves the special security sanctions against China, the relevant countries can directly invoke the US sanctions program without conducting special safeguard investigations.
Earlier, the Bush administration of the United States had initiated six special safeguard investigations against China and none of them had taken special safeguard measures.
View related topics: China and the United States tire special security case
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