Trade war between US&China

Present

Chayun Tantivasadakarn

By

Chatwich Chatchaiwatkul 5004640149Kandanai Chotikapracal 5004640370

Trade war between US&China

Recently, there has been a conflict between US&China about the tariff rate.

Tires Trade Frozen Chicken Solar panel

2003 2004 2005 2006 2007 2008 2009 2010Merchandise TradeExportsActual 724.4 818.3 908.4 1032.1 1149.2 1291.3 — —Forecasted — — — — — — 1,035.1 1,025.0ImportsActual 1284.0 1499.5 1705.3 1882.7 1985.2 2,112.5 — —Forecasted — — — — — — 1,489.9 1,661.9Trade BalanceActual -550.9 -669.6 -787.1 -838.3 -819.4 -821.2 — —Forecasted — — — — — — -429.9 -581.8

Table forecast of US

Tired Trade

MSNBC.comSaturday, September 12,2009

The President Obama announced to impose a tariff on tires from China.

Since there are 5,000 jobs have been lost over the past five years and in 2006 and 2007, U.S. four tire plant closed and three more are closing in this year.

MSNBC.comSaturday, September 12,2009

Obama settled the tires tariff rate at an extra 35 percent in the first year, 30 percent in the second year, and 25 percent in the third.

G20 have made a strong statements critical of countries that US protect their key industries.

Frozen Chicken

Solar Panel

businessweek.comMonday, October 12, 2009 The US customs decision is dividing the

industry between importers and companies that produce solar equipment in the United States. And with China accounting for a rising share of American imports, the tariff could become a sticking point in bilateral trade relations already troubled by the dispute over tires, autos and chicken parts.

The United States exported almost as much solar panel equipment as it imported in the first seven months of this year 605— $ mil

555lion in imports and $ million in exports, tt tttttttt tttttttttt ttttt.

Due to President Obama’s announcement of 35% tariff on automobile tires imported from, the sudden decision to place a 2.5% tariff on imports is legally binding on most solar panels imported into the United States. But virtually no one in the industry became aware of it until just recently. Meanwhile, unpaid duties piled up, along with penalties that are likely to double the cost.

businessweek.comMonday, October 12, 2009

businessweek.comMonday, October 12, 2009

companies that import solar panels to the United States are facing up to $70 million in unexpected tariff. The bill comes at a time when the industry is already struggling and could hurt both foreign solar panel makers and foreign and American distributors.

The US Solar Energy Industries Association estimates that by achieving a goal of 12.5 percent of electricity generation to come from solar by 2020, 1.5 million new jobs in the solar industry will be created.

businessweek.comMonday, October 12, 2009

However, many panel manufacturers are losing money due to fierce competition from ever-expanding production in China and a worldwide downturn that has driven down prices.

Raising prices to cover past tariffs will be hard because the market is glutted with panels; prices have fallen a fifth since early this year.

Analyze The state benefits from solar directly

since most of the money spent goes toward the building materials and equipment produced and installed by Arizona companies thereby staying in the State.

therefore the money will flow inside the US.

Anti-protectionist statement Beijing says the duties would be a violation

of global free-trade principles and has complained about U.S. protectionism.

Roy Littlefield said ‘it would not save American jobs but only cause tire manufacturers to move production to another country with less strict environment and safety controls, less active unions and lower costs than United States.’

Politics from impose the tariff The tire dispute threatens an

economic relationship crucial to China’s economic growth.

There would potentially spark a dangerous trade war.

Moreover, China gov’t also could sell some of its extensive holdings of U.S. Treasury debt.

Table 2: Top US Exports to China 2008 ($ billion)

*Percent change over 2007Sources: US International Trade Commission, US Department of Commerce, and US Census Bureau

HS# Commodity Description Volume % Change*

85 Electrical machinery & equipment 11.4 6.8

84 Power generation equipment 9.7 10.0

12 Oil seeds & oleaginous fruits 7.4 76.2

88 Air & spacecraft 5.1 -29.0

39 Plastics & articles thereof 3.8 6.6

90 Optics & medical equipment 3.7 12.9

72, 73 Iron & steel 3.3 18.5

47 Pulp & paperboard 2.3 11.2

76 Aluminum & articles thereof 2.1 16.6

29 Organic chemicals 2.1 -0.8

TableTable 3: Top US Imports from China 2008 ($ billion)

*Percent change over 2007Sources: US International Trade Commission, US Department of Commerce, and US Census Bureau

HS# Commodity Description Volume % Change*

85 Electrical machinery & equipment 80.3 4.784 Power generation equipment 65.1 1.795 Toys & games 27.2 4.061, 62 Apparel 24.0 0.194 Furniture 19.4 -4.772, 73 Iron & steel 14.8 24.764 Footwear & parts thereof 14.5 2.439 Plastics & articles thereof 8.9 8.242 Leather & travel goods 7.4 2.187 Vehicles other than railway 6.4 4.9

ModelTire (Labour)Solar panel (Capitalist)

Conclusion As the effect of this situation,

jobs will be more provided for US citizens as we conclude by analyzing the model

But as China, jobs will be decline as well as causing the excess supply in both tires and solar panel industries.

Reference http://www.uschina.org/statistics/tradetable.html http://www.usitc.gov/tata/hts/ http://www.nytimes.com/2009/10/01/business/global/01tariff.html?_r=1 http://www.reuters.com/article/pressRelease/idUS10038+17-Jun-

2008+BW20080617 http://www.bharatbook.com/Market-Research-Reports/Research-Report-on-

Chinese-Tire-Export.html http://www.bjreview.com.cn/world/txt/2009-09/22/content_218058.htm http://www.msnbc.msn.com/id/32808731/ns/business-world_business/ http://www.bloomberg.com/apps/news?pid=20601103&sid=aqVCDzPQt8eg http://www.washingtonpost.com/wp-dyn/content/article/2009/09/11/

AR2009091103957.html http://www.foxnews.com/politics/2009/09/11/obama-administration-slaps-

tariffs-chinese-auto-imports/ http://thehill.com/homenews/news/58383-obama-hits-china-with-tariffs-on-

tires

Thank you For YouR Attention