President Obama faces a September 17th deadline to determine whether to go along with the International Trade Commission’s recommendation to impose high tariffs on low end Chinese tires. The US has the authority to impose these tariffs under section 421 of China’s complicated WTO accession agreement. There were six similar cases during the Bush administration, although in no cases were tariffs implemented, including four separate cases where President Bush himself shot down the commission’s prescription.
This is the first China trade case for President Obama and it is therefore being watched very closely both in the United States and in China. Interestingly, the tire unions brought this case and the tire companies have been noticeably quiet, presumably in an effort to maintain their good standing in China as they try to capture a piece of the rapidly expanding Chinese tire market. It will be interesting to see how Obama plays this as he tries to avoid angering the Chinese before the September 20 G-20 meeting and before his November visit to China, while also trying to placate the unions, who supported him in the election.
There aren’t that many places to get really insightful analysis of such a technical issue, but AmCham-China just did an excellent podcast with Akin Gump’s Spencer Griffith. Griffith is a highly respected international trade lawyer who clearly knows his stuff and my friend Josh Gartner does a great job with the questions. I’ve been enjoying AmCham-China’s “China Brief Insight” podcasts for a while (hey, they had me on, so how bad could it be?) and I highly recommend you catch this podcast interview if you have any interest in US-China trade issues and on what may very soon be coming down the pike. Click here if you want to get it through iTunes.