The Sino-U.S. tire special security case involving a value of US$2.2 billion worth of exports has continued to heat up in recent days. A number of industry insiders predict that in the “China-US Tire Special Protection Caseâ€, the U.S. government may eventually use a compromise scheme to strike a balance between the normal tariff of 4.4% and the special tariff of 55%.
Our reporter yesterday interviewed Zhang Tao (a pseudonym, unable to disclose his name because the case was not terminated) of the Chinese tires company’s senior consultant to the United States. He was informed that most industry representatives who testify that the sanctions against Chinese tires outweigh the benefits. Once implemented, the United States will There are 100,000 employees engaged in the Sino-U.S. tire trade "off the job."
U.S. sanctions will not be worth the candle
Guangzhou Daily: At present, the trial progress of the special security case?
Tao Zhang: The hearing was held on August 7th local time. It is expected that representatives of the Ministry of Commerce of the People's Republic of China will exchange views with the U.S. Department of Commerce on this case on August 24. The President of the United States will make a final decision on this case before September 17.
Guangzhou Daily: What are the key factors that can win this special security case at present?
Zhang Tao: The key to success depends on the game between the US tire manufacturing industry and the retail trade industry. According to calculations, once the 55% special tariff is levied on Chinese tires, Sino-US tire trade may no longer exist, and 100,000 jobs in relevant positions will not be guaranteed. More importantly, the mid-tier US consumers have become a fixed customer base for China's tires. If they want to re-select high-priced tire products, given the current economic situation, such a decision is clearly not supported by the public.
Negotiating chips
China's tire quality is recognized in the United States
Guangzhou Daily: What is the biggest resistance faced by Chinese companies?
Tao Zhang: The U.S. trade union representative (USW) is the biggest resistance. USW believes that the value of China’s tire imports increased by 295% from 2004 to 2008, during which time the US’s locally produced tire market share fell by 25%. USW claims that about 5,100 American tire manufacturing workers are unemployed.
However, in fact, the high-end customer base of tires imported from China is different from that of the United States. If it is forced to shut out Chinese high-quality tires, consumers will have to increase their burden. Moreover, the imposition of special tariffs is contrary to the fair trade principles of the WTO, and the United States will be labelled as “trade protectionâ€.
U.S. may use a compromise solution
Guangzhou Daily: What is expected from the U.S. trade representative to the Obama administration's second adjudication plan?
Zhang Tao: The chance of winning the Chinese company’s business is a bit higher than previously expected. It is expected that the U.S. government will eventually balance the opinions of the two parties and use the "eclectic" plan. At present, the US tariff on Chinese tire imports is 4.4%. After ITC ruled that the special tariff was 55%, the U.S. government may take a balance between these two ends. For example, the United States may estimate that Chinese companies can accept 10% to 15% of the tariff. Chinese enterprises must make every effort to gain favorable chips and obtain a "trade-off plan" that is beneficial to China.
Negotiating significance
"Special Protection Case" Will Influence China-US Economic and Trade Relations
The U.S. International Trade Commission proposed to impose 55%, 45%, and 35% ad valorem special tariffs on China's passenger-to-substance passenger vehicles and light truck tires for three consecutive years. Previously, as a result of Brazil increasing tire tariffs, many tire companies in China have withdrawn from the Brazilian market.
"Special protection" is a by-product of China's accession to the WTO in 2001, and stipulated that the United States could use special safeguard measures for China's relevant products under appropriate conditions. This case was the first special security investigation application after Obama took office. "If this special insurance is finally approved, the Sino-U.S. economic and trade relations will be greatly affected, which means that special security investigations can be filed against a certain industry at any time. The losses are unimaginable," said the industry insider.
View related topics: China and the United States tire special security case
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