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Trade war between US&China

Present

Chayun Tantivasadakarn

By

Chatwich Chatchaiwatkul 5004640149


Kandanai Chotikapracal 5004640370
Trade war between US&China

 Recently, there has been a conflict


between US&China about the tariff rate.
 Tires Trade
 Frozen Chicken
 Solar panel
Table forecast of US
2003 2004 2005 2006 2007 2008 2009 2010
Merchandise Trade
Exports
Actual 724.4 818.3 908.4 1032.1 1149.2 1291.3 — —
Forecasted — — — — — — 1,035.1 1,025.0
Imports
Actual 1284.0 1499.5 1705.3 1882.7 1985.2 2,112.5 — —
Forecasted — — — — — — 1,489.9 1,661.9
Trade Balance
Actual -550.9 -669.6 -787.1 -838.3 -819.4 -821.2 — —
Forecasted — — — — — — -429.9 -581.8
Tired Trade
MSNBC.com
Saturday, September 12,2009

 The President Obama announced to


impose a tariff on tires from China.
 Since there are 5,000 jobs have been
lost over the past five years and in
2006 and 2007, U.S. four tire plant
closed and three more are closing in
this year.
MSNBC.com
Saturday, September 12,2009

 Obama settled the tires tariff rate at an


extra 35 percent in the first year, 30
percent in the second year, and 25
percent in the third.
 G20 have made a strong statements
critical of countries that US protect their
key industries.
Frozen Chicken
Solar Panel
businessweek.com
Monday, October 12, 2009

 The US customs decision is dividing the


industry between importers and companies
that produce solar equipment in the United
States. And with China accounting for a
rising share of American imports, the tariff
could become a sticking point in bilateral
trade relations already troubled by the
dispute over tires, autos and chicken parts.
 The United States exported almost as much
solar panel equipment as it imported in the
first seven months of this year — $605
million in imports and $555 million in
exports, according to Commerce Department
data.
businessweek.com
Monday, October 12, 2009

 Due to President Obama’s announcement of


35% tariff on automobile tires imported
from, the sudden decision to place a 2.5%
tariff on imports is legally binding on most
solar panels imported into the United
States. But virtually no one in the industry
became aware of it until just recently.
Meanwhile, unpaid duties piled up, along
with penalties that are likely to double the
cost.
businessweek.com
Monday, October 12, 2009

 companies that import solar panels to the


United States are facing up to $70 million
in unexpected tariff. The bill comes at a
time when the industry is already
struggling and could hurt both foreign solar
panel makers and foreign and American
distributors.
 The US Solar Energy Industries Association
estimates that by achieving a goal of 12.5
percent of electricity generation to come
from solar by 2020, 1.5 million new jobs in
the solar industry will be created.
businessweek.com
Monday, October 12, 2009

 However, many panel manufacturers are


losing money due to fierce competition
from ever-expanding production in China
and a worldwide downturn that has driven
down prices.
 Raising prices to cover past tariffs will be
hard because the market is glutted with
panels; prices have fallen a fifth since early
this year.
Analyze
 The state benefits from solar directly
since most of the money spent goes
toward the building materials and
equipment produced and installed by
Arizona companies thereby staying in
the State.
 therefore the money will flow inside
the US.
Anti-protectionist statement
 Beijing says the duties would be a violation
of global free-trade principles and has
complained about U.S. protectionism.
 Roy Littlefield said ‘it would not save
American jobs but only cause tire
manufacturers to move production to
another country with less strict
environment and safety controls, less active
unions and lower costs than United States.’
Politics from impose the tariff
 The tire dispute threatens an
economic relationship crucial to
China’s economic growth.
 There would potentially spark a
dangerous trade war.
 Moreover, China gov’t also could sell
some of its extensive holdings of U.S.
Treasury debt.
Table 2: Top US Exports to China 2008 ($ billion)

*Percent change over 2007


Sources: US International Trade Commission, US Department of Commerce, and US Census Bureau

%
HS# Commodity Description Volume
Change*

85 Electrical machinery & equipment 11.4 6.8

84 Power generation equipment 9.7 10.0

12 Oil seeds & oleaginous fruits 7.4 76.2

88 Air & spacecraft 5.1 -29.0

39 Plastics & articles thereof 3.8 6.6

90 Optics & medical equipment 3.7 12.9

72, 73 Iron & steel 3.3 18.5

47 Pulp & paperboard 2.3 11.2

76 Aluminum & articles thereof 2.1 16.6

29 Organic chemicals 2.1 -0.8


Table
Table 3: Top US Imports from China 2008 ($ billion)

*Percent change over 2007


Sources: US International Trade Commission, US Department of Commerce, and US Census Bureau

%
HS# Commodity Description Volume
Change*
85 Electrical machinery & equipment 80.3 4.7
84 Power generation equipment 65.1 1.7
95 Toys & games 27.2 4.0
61, 62 Apparel 24.0 0.1
94 Furniture 19.4 -4.7
72, 73 Iron & steel 14.8 24.7
64 Footwear & parts thereof 14.5 2.4
39 Plastics & articles thereof 8.9 8.2
42 Leather & travel goods 7.4 2.1
87 Vehicles other than railway 6.4 4.9
Model
Tire (Labour)
Solar panel (Capitalist)
Conclusion
 As the effect of this situation,
jobs will be more provided for US
citizens as we conclude by
analyzing the model
 But as China, jobs will be decline
as well as causing the excess
supply in both tires and solar
panel industries.
Reference
 http://www.uschina.org/statistics/tradetable.html
 http://www.usitc.gov/tata/hts/
 http://www.nytimes.com/2009/10/01/business/global/01tariff.html?_r=1
 http://www.reuters.com/article/pressRelease/idUS10038+17-Jun-
2008+BW20080617
 http://www.bharatbook.com/Market-Research-Reports/Research-Report-on-
Chinese-Tire-Export.html
 http://www.bjreview.com.cn/world/txt/2009-09/22/content_218058.htm
 http://www.msnbc.msn.com/id/32808731/ns/business-world_business/
 http://www.bloomberg.com/apps/news?pid=20601103&sid=aqVCDzPQt8eg
 http://www.washingtonpost.com/wp-
dyn/content/article/2009/09/11/AR2009091103957.html
 http://www.foxnews.com/politics/2009/09/11/obama-administration-slaps-
tariffs-chinese-auto-imports/
 http://thehill.com/homenews/news/58383-obama-hits-china-with-tariffs-on-
tires
Thank you For YouR Attention