Lila Kalick of the Campaign for America’s Future penned an excellent piece analyzing the prospects for U.S.-China trade policy under the Obama Administration.   And she notes the significance of the recent ITC decision in favor of U.S. tire manufacturers who were dealing with a surge of tires from China:

On Monday, The International Trade Commission (ITC) unanimously voted to recommend that President Obama impose tariffs on the import of Chinese tires for three years. The new administration will have until September 17 to decide what, if any, relief to provide based on the ITC’s recommendation. Will Obama cave to the power of business lobbies and conservatives to follow in the footsteps of President Bush, or support a policy that will help our long term economy?

Read more.

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As we’ve reported many times, there are continuing problems with unsafe imports from China.  And sicne little has changed, it doesn’t surprise us to learn that, as McClatchy News reports, ‘Chinese makers of shoddy goods rarely face U.S. sanctions.’

According to McClatchy News:

Chinese manufacturers made more than half of the goods that the U.S. Consumer Product Safety Commission recalled last year, but few of them paid any price for producing defective wares.

The long list of faulty products included Chinese-made highchairs whose seat backs failed, steam cleaners that burned their users, bikes whose front-wheel forks broke, saunas that overheated, illuminated exit signs that stopped working when commercial power failed, dune buggies whose seat belts broke on impact and coffee makers that overheated and started fires.

Click here to read more.

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TireBusiness.com is running a poll asking “Do you agree with the ITC’s ruling in favor of the United Steelworkers’ petition seeking to impose quotas on Chinese tire imports?” 

The choices are:  (1) Yes, these imports have harmed the domestic tire industry; (2) No, the imports are an effect, not a cause, of the domestic makers pulling out of some segments; (3) think imports have hurt the domestic industry, but I don’t think trade restrictions are the answer and (4) I’m not sure.

ManufactureThis just answered the poll and selected choice #1.

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Several weeks ago, ManufactureThis reported on the ongoing action by the U.S. International Trade Commission on a request by United Steelworkers in early 2009 requesting that the Administration cut the number of Chinese tire imports.  
 
As we reported then, the petition – and the ITC’s response – was based on both the market disruptions that occurred because of China’s unfair (and often illegal) trade practices as it relates to its tires, as well as safety problems that caused two deaths, several serious injuries and a number of tire separation incidents in the U.S. 
 
The original petition requested that the government only allow 21 million tires from China to be imported into the U.S. in the coming year, which would bring imports back to less half the 46 million units imported in 2008. 
 
Earlier this month, the ITC ruled in favor of the petition, finding that as a result of its cheating both economically and safety-wise, China’s tires were indeed a source of concern both to U.S. manufacturers and consumers. 
 
As AAM’s Steven Capozzola noted, yesterday the ITC took further action by recommending to the White House that three years of tariffs be applied to imports of Chinese tires.  Its suggested remedy would impose tariffs of 55%, 45% and 35% respectively over a three-year period and would have the same affect on decreasing the number of imports as would quotas – in fact, some analysts believe that the tariffs may even have a greater impact. 
 
These remedies will be formally presented to President Obama on July 9, with White House action to accept or reject them due by September 17th.  The ITC ruling also left the door open for either U.S. Trade Representative Ron Kirk or President Obama to impose additional tariffs or import restrictions.

 
So lets recap on Chinese tire manufacturers - they cheat, their tires blow up, and if history tells us anything, they are not likely to clean up their act anytime soon.  With Americans headed to their cars for vacation purposes over the next few months, they want to be sure that their spouses, their children, and Fido and Fluffy are being carried to the beach or into the woods on tires that will get them there safely. 
 
The jobs of U.S. manufacturers and their employees - who play by the rules and obey trade and safety rules that China ignores – must be protected.
 
Should President Obama accept the ITC’s recommendations?  Should the U.S. impose corrective tariffs on Chinese tires?  Um, duh. 

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On the subject of House legislation to address carbon emissions, the President said on Sunday, “At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals out there…I think there may be other ways of doing it than with a tariff approach.”

What the president was referring to was a provision in the bill that would impose “border adjustment” fees on countries that do not move to jointly curb their carbon emissions.

To call such a measure “protectionist” is incorrect and misguided.  China is the world’s leading industrial carbon emitter, and is also well-documented as the leading polluter.  Placing new and onerous restrictions on U.S. manufacturers, who already adhere to strict emissions controls and environmental regulations, while doing nothing about China’s massive pollution, makes no sense.  In fact, it will only ensure that more production moves to China, which means more carbon emissions, which will negate the desired effects of any U.S. colimate bill. 

ManufactureThis wonders who has advised the president on this issue, and how they are missing the overarching common sense view?

Bloomberg News reports that U.S. Trade Representative Ron Kirk has asked Chinese officials to revoke a requirement for Web-filtering software on all new personal computers, saying it may violate World Trade Organization rules.

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As regular readers of ManufactureThis know, toxic drywall imported from China and into homes primarily in coastal areas has been causing rancid odors, rotting wood and wiring, and serious health problems for homeowners.
 
The multiple class action lawsuits initiated by homeowners and contactors against the importers of the defective drywall as well as its Chinese manufacturers lead to a large drywall litigation conference held in Orlando in early June.
 
Additionally, the federal judicial panel that assigns multi-district lawsuits to specific courts has aggregated the lawsuits and assigned them to be tried in New Orleans, a city that has had significant problems with the deadly drywall after shortages due in part to repairs made necessary by Hurricane Katrina decreased the availability of safe U.S.-made product. 
 
Observers expect these proceedings to be long and complex, as hundreds of suits have already been filed.  However, that figure is nowhere near the number of homeowner complaints as Florida alone is investigating nearly 500 claims, and a dozen other states are dealing with reports of problems. 
 
The U.S. Consumer Product Safety Commission recently launched a Drywall Information Center web site to assist homeowners and track data.  The Environmental Protection Agency and the Center for Disease Control are also actively addressing the toxic drywall crisis.
 
State agencies and legislators in affected states are investigating the problem, and the U.S. House of Representatives and the Senate are aggressively pursuing answers and remedies for affected homeowners.
 
Florida Congressman Robert Wexler calls the toxic drywall problem “an acute and growing crisis” and along with other Congressmen and Senators, he is calling for an immediate ban of Chinese drywall and stricter safety regulations for future imports of building materials.   Federal legislators are also calling on the IRS to allow homeowners to take a full tax credit under casualty loss provisions in the tax code to help them afford toxic drywall repairs.
 
All levels of government are clearly taking his problem very seriously and looking for swift and innovative ways to provide relief.  However, the extent to which homeowners must go – stripping walls down to studs in most cases – promises a long and expensive process, and the long term prognosis for people who have become ill from the drywall is yet unknown.
 
Poisoned dog food, tainted toothpaste, contaminated toys, exploding tires and toxic drywall – what will it take for U.S. trade and commerce agencies to enact policies that put a burden on China’s manufacturers to prove that their products are safe before their widgets even step foot on our shores?

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American political dialogue has reached a strange point lately.  When voices in the U.S. business and labor communities call for action to address China’s rampant violations of world trade law, they are shouted down as being “protectionist.”  But this makes absolutely no sense, since they are merely pointing out China’s own pre-existing (and well-documented) protectionism.

It’s good, then, to read Keith Bradsher’s article in the New York Times this week.  Bradsher, who is based in Hong Kong, has frequently reported on manufacturing issues throughout China.  This week he notes that Beijing has “sharply expanded three programs to help exporters” and has “has banned all local, provincial and national government agencies from buying imported goods except in cases where no local substitute exists”:

Risking the ire of the United States and other trading partners, the Chinese government has quietly started adopting policies aimed at encouraging exports while curbing imports, even though China, as one of the world’s largest exporters, has aggressively criticized protectionism in other countries.

Bradsher also reports that, unlike the U.S., China has yet to sign on to “a global agreement barring protectionism in government procurement.” 

The bottom line is that China appears unwilling to share in the load of trying to lift the world out of recession.  Bradsher quotes Michael Wessel, a commissioner on the United States-China Economic and Security Review Commission: “China is not only continuing but accelerating many of the protectionist approaches they’ve taken in the past to promote economic development.”

If China is unwilling to make the same sacrifices as other industrial nations, and continues to self-servingly protect its own manufacturing base, then the U.S. must begin to strongly enforce its trade laws.  The recent Obama Administration decision to file a trade case against China in the WTO is a good start.

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Obama Administration criticizes China’s web filtering requirement.

Senators worry about the future of our employer-based health care system.

More than 100 House Democrats call for new rules on trade.

As the vote roundup continues in the House, what is the outlook for climate change in the Senate?

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Yesterday we noted the significance of the Obama administration bringing its first trade case against China in the World Trade Organization (WTO).  Well, it looks like positive reaction has been swift and widespread.  There has been much approval of this important step in enforcement of U.S. trade law, including from such diverse voices as the American Iron and Steel Institute (AISI), which called it a “critical step,” the United Steelworkers (USW), who gave it “strong support,” and Sen. Debbie Stabenow (D-MI), who said “I hope the WTO holds China accountable.”

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