News to China: Fair Trade means Trade Fair.

WTO Decision: Chinese Tires Dumped!

 Our original post on this subject: Chinese tire dumping .
 A ruling announced yesterday by the World Trade Organization (WTO)  upheld U.S. tariffs levied on China-made tires entering the U.S.
 Moments after the WTO ruling the Chinese said they would appeal the decision.
Here is a summary of findings and conclusions.
The WTO’s dispute settlement panel rejected China’s position  that U.S. tariffs imposed last September on all Chinese tires violated global trade rules.  
China  retaliated  against the U.S. tariffs by slapping duties on a variety of American-made products, including chicken and nylon. 
So much for a commitment to trade fair under WTO by China.
So much for mature behavior from our “global trading partner” and “manufacturer to the world.”
The decision to impose the tariffs came last September after a complaint brought by the United Steelworkers union was confirmed by the U.S. International Trade Commission and subsequently recommended by the ITC.  The tariffs levied are 35% in the first year, 30% in the second year and drop to 25% in the third year. 
 According to the initial complaint, China has more than tripled its low cost tire exports to the U.S. between 2004 and 2008, costing the U.S. tire industry more than 5,100 jobs.
Maybe that’s why its called Dumping.
 The ITC ruled June 19th that Chinese tire manufacturers were dumping their products on the U.S. market, hurting domestic tire manufacturers and causing increased unemployment in the domestic tire industry. 
And now the WTO agrees.

The WTO just handed China a 460 page ruling regarding how the country handles American books, movies, and music. Here is a 9-page .pdf of the conclusions and findings.
Dispute DS363 (here’s a summary) has at its core how the Chinese distribute and ‘protect’ from piracy American creative works in that country. So why should  precision machine products manufacturers care about how the Chinese “distribute Hollywood movies, books, and music?”
Sometimes the law defends plunder and participates in it. Sometimes the law places the whole apparatus of judges, police, prisons and gendarmes at the service of the plunderers, and treats the victim – when he defends himself – as a criminal.”- John Frederick Bastiat
Reason 1: Intellectual property rights are at the root of every bit of legitimate commerce. It isn’t just Hollywood movies being pirated across the pacific. Industrial designs, machined parts, counterfeit products are legion from the country  whose premier, Hu Jintao, Mr. Obama will soon host.
Reason 2: This is the portent of the authentic test of President Obama: his dealings with Hu Jintao next month at the G 20 Summit in Pittsburgh Sept 24-25, 2009.  Will he execute the appropriate remedial actions against the Chinese violations recognized and confirmed by due process via the WTO, and ITC, protecting American jobs and interests?
Before that Pittsburgh meeting, the administration must rule on a recommendation by the US International Trade Commission  to impose  up to a 55% tariff on Chinese Tires.  We’ve been following the Cheap Chinese Tires  deaths cases since our ethics class  at Walsh University in July of 2007.  These issues have been around for a long time… the current cheap tire  row is a suit filed by the USW who charged that the flood of cheap Chinese tires had resulted in massive loss of jobs.
Is Obama as wise as Solomon? Will he stand up for American interests? How will he, as one of the world’s leading debtor executives- respond to his legal responsibilities to enforce the trade laws with China, perhaps his largest creditor?
Will he deliver the remedy won by the USW against Chinese dumping, in light of his need for cooperation from China, a leading purchaser of US Treasuries?  Or will he  acquiesce,  complicit in the plunder of American intellectual property rights and jobs?
After 8 years of nonfeasance on the China Currency Issue out of Washington D.C., we’re wondering.
Could this be a Change?
“The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.” John Frederic Bastiat
Watch these China cases for a glimpse of our industry’s future. And an understanding of what the current administration thinks of manufacturing.