Streatching the Global Trade Muscle
Thursday - Sep 24, 2009 - 11:28 PMThe recent US announcement about an order to impose tariff on Chinese produced tires has little to no consequence to the US-China relations.
First of only, the United States has used it's right to do so. One of the conditions put in place before China could join the World Trade Organization was that it had to accept that the United States could impose such tariffs basically on any of the Chinese imports if it perceive is as a threat. So there you have it.
The Chinese, despite, some protests to the new tariff filed with the WTO, do not have in their best interest damaging the rest of the trade that's going on between the two countries. Neither does the US for that matter.
With China being the largest holder of US international debt, the cooperation between the two countries should be anything but smooth. Further tariffs are unlikely.
So what was the move for, you may ask. It appears thought as the move was to improve the image of President Obama among the US workers, unions and general public. It's all about saving local jobs after all. The fact that only several thousands of jobs are being saved is not really emphasized that much. If the US was to continue on that path, it could destabilize the world financial market. And for the country like United States, just about getting ready to get out of a bad recession, it's the last thing it would want.
In summary, it's simply politics as usual.
