The Chinese have already collected approximately $1.3 trillion dollars, as part of these currency manipulations. This is a huge amount, approximately equal to 9% of what the United States economy produces in a single year. It is impossible to not see what is going on, yet the Bush administration tells Congress that the Chinese are not manipulating their currency!
And the Chinese currency manipulations not only provide a direct Chinese government subsidy of at least 40% to all Chinese exports to the United States, they also provide an illegal import duty of at least 40% on all American made products sold to China. The International Monetary Fund rules specifically make such manipulations illegal. Yet the Bush Administration pretends that nothing is happening.
The 30% Chinese tariffs against US autoparts going to the Ford and GM factories in China were recently declared to be illegally high by the WTO, but where are the counter-tariffs from the Bush administration?
Nor, have I seen a single story reporting any objection from the Bush administration to the new 40% Chinese duties on US heavy mining equipment to protect the three new Chinese mining equipment factories, despite the fact that mining equipment remains one of the United States' biggest remaining export industries.
Perhaps because President Bush ran on a steel-protectionist platform in 1980, the Bush administation decided to act this time. President Bush, after all, likes to keep his promises.
There are four trade positions:
- Free Trade - belief that no tariffs should be imposed to give one industry an advantage over another industry. For free trade to be beneficial it must be balanced.
- Protectionism - belief that those industries that are on the government's favored list should be protected, even though that protection might hurt industries that are not on the government's favored list. Protectionism only hurts a country when trade is balanced, otherwise it can protect an industry without hurting other industries.
- Mercantilism - a system that allows a government to manipulate trade in order to produce trade surpluses. Favored industries are protected without hurting other industries. Mercantilism is a system of protectionism that steals industries from trading partners when those trading partners tolerate trade imbalances.
- Balanced Trade - a system that opposes mercantilism by assuring that trade is balanced. It can be practiced without providing any preference to one industry over another.
Here is a selection from the Reuters story as posted on Forbes Magazine's website:
WASHINGTON (Reuters) - The U.S. Commerce Department said Friday it has set a combined import duty of around 700 percent on a major Chinese steel pipe producer to offset unfair pricing practices, and combined duties of more than 106 percent on many other Chinese manufacturers and exporters.
"Chinese subsidies and undervalued exports dumped in the United States by Chinese standard pipe producers put American producers at a disadvantage in the global marketplace and distort global trade flows," David Spooner, Commerce assistant secretary for import administration, said in a statement.
The department levied a 615.92 percent countervailing duty on standard steel pipe exported by The Shuangjie Group to offset Chinese government subsidies.
It also imposed an additional anti-dumping duty of 85.55 percent on Shuangjie Group exports to offset prices that Commerce said were "less than normal value."
The pipe's applications include plumbing and heating systems, air-conditioning units and automatic sprinkler systems. It is used to carry water, natural gas, steam and other gases and liquids.
The United Steelworkers union and a half-dozen pipe manufacturers in Illinois, Kentucky, Oregon, Pennsylvania, California and New Jersey filed a case last year asking for relief from low-priced Chinese imports....
The Commerce Department said other Chinese standard pipe manufacturers and exporters would face combined anti-dumping and countervailing duties of more than 106 percent.
It set a 69.20 percent anti-dumping duty on 31 Chinese companies. It also set an 88.55 percent anti-dumping duty on Jiangsu Yulong Steel Pipe Co. and on other Chinese suppliers not specifically named in the investigation.
In the countervailing duty probe, it set a 29.57 percent duty on Weifang East Steel Pipe Co, a 44.86 percent duty on The Kingland Group and a 37.22 percent "China-wide" rate on other suppliers.
The U.S. International Trade Commission must make a final determination by July 14 that Chinese steel pipe imports are injuring, or at least threatening to injure, domestic producers for the duties to remain in place.
If the ITC votes in favor of the duties, they will be retroactive to late 2007, Kaplan said.
Follow the following link to read the story: http://www.forbes.com/reuters/feeds/reuters/2008/05/30/2008-05-30T204854Z_01_N30307348_RTRIDST_0_USA-CHINA-TRADE-UPDATE-2.html