China Trade: High Time for a Change in US Policy

TradeAlert.org ^ | Friday, August 15, 2003 | William R. Hawkins

[LibertyAndJusticeForAll]

Thanks for posting!
William Hawkins is HIGHLY qualified to write on this subject and he states his views with clarity:

[ ... How do we get from talk to action?
Treasury Secretary Snow seems to want to approach the matter very quietly. Visiting a Harley-Davidson plant in suburban Milwaukee in late July, he said he was "encouraged by the fact that the Chinese have indicated that they are looking at widening" the allowable fluctuation of the yuan. He said he may address the issue when meeting Chinese officials later this year, but warned against escalating the matter into a trade battle. "These are sovereign decisions," he said. "These are not decisions the United States can impose on anybody."

It is unknown whether Snow realized that the reason there was still a Harley-Davidson plant to visit is because the Reagan Administration acted directly to protect the American motorcycle industry from damaging Japanese imports. Reagan approved a Section 201 finding by the U.S. International Trade Commission (ITC) and imposed tariffs on Japanese exports as an act of American sovereignty.
….
China tightly controls the flow of capital across its borders allowing only partial convertibility of the currency on the capital account. Foreign exchange trading on the current account is regulated. The government still directs the allocation of scarce inputs, state-owned enterprises are heavily subsidized and protected, and the private sector only employs one-fourth of the urban work force. China is a mercantilist, not a free market system. Its currency manipulation is central to its approach to the world economy, not an exception. ]

[The Pheonix]

ping

[grania]

See number 11 on hislist.

His #11 is pretty inclusive about most of my concerns, true. It does not, however, specifically mention an armed presence of the border with Mexico. Without that, for every illegal that's sent packing, others will just cross that porous border, with no help from Mexico to stop it.

[hedgetrimmer]

So just because all the other countries in the world are doing economic harm to us, we shouldn't defend ourselves?

[staytrue]

The trade issue is complicated.

China is responsible for 1/5 of the deficit so you can blame 1/5 of the problem on cheap chinese labor and/or undervalued currency. Revaluing the Chinese currency might help here.

Another 1/5 is energy imports. More drilling in alaska and the gulf with relaxed enviromental regulation for natural gas is the solution there.

Another 1/5 is with Canada and Mexico (nafta). I don't have any solution.

Another 1/5 is with the EU. Again, no solution.

Another 1/5 is with everyone else. Again, no solution.

The US trade deficit is so enormous, there is not a single scapegoat you can pick and no single solution. A general solution where we control our own destiny is to decrease regulation and taxes on business so they are more competitive. More drilling for gas and oil would help. Perhaps a small 1-2% tariff would help.

Bottom line is, US consumers spend 500 billion more than they earn. We must work more or spend less. The American consumer will not be happy to work more and get to spend less.

[harpseal]

Okay lets look at the trade issue and deal with your fifths. First, we have my proposal posted on this thread to generally make uius more competitive which should take care of the one fifth from China and the one fifth from everyone else. Now I also note provision 1 does not exclude the EU but I submit by implementing the other provisions with additional American investment prodcutivity will take care of the remainder except the energy portion but we will be exporting enough to more than cover that. remember Canada and Mexico are energy exporters.

We also have the alaskan reserves as yet untapped (see the point abouit government regulation).

[harpseal]

I thought I covered that with and take measures that prevent the entry of any more illegal aliens.

Not your exact lanhguage as you are merely specifiying one set of measures and there are others as we get illegals through every means of entry.

[GOP_1900AD]

Look at how the Russians literally invited the PRC to develop infrastructure in their Pacific region. I fear that non aggression pact has already been in place for some time!

[GOP_1900AD]

The New Fulda gap is the Mekong Gap. Siberia is already fully accessible and used by the PRC. Lost already and at the invitation of Moscow. The next thrust will be to the South, in order to control the Strait of Malacca, strategically encircle India, divide ASEAN from India and the West, and, ultimately, to turn Australia into a cowering vassal state.

[RinaseaofDs]

I don't think that the advantage in manpower is as big a deal as it used to be.

I do think, however, that the US is looking at new uses for battlefield nukes for good reasons. I read a post where they have a weapon that uses massive gamma radation to wipe out a bunch of people.

[txhurl]

Egads.

So.... which is inherently entropic, Marxism or Capitalism?

Both?

[staytrue]

I personally find the posts that say all we got to do to fix the trade deficit is to kick the illegals out and boycott chinese goods.

I say, these measures might help, but even after that, we still have a big problem.

I stills say, we must consume less or work more or some combination which is unpalatable to the US public.

I think we can get a bit of a free lunch by simplifying or eliminating the income tax code, tort reform, reducing govt. spending taxation and regulation. After that, the free lunch stops.

[RinaseaofDs]

I'm not sure what prompted the question, but it is interesting nonetheless.

One theory as to why the US worked as an experiment is that it was the first to guarantee a persons right to be secure in their property.

Basically, we finally acknowledged that people are greedy, and that it is okay because they do what is in their self-interest.

Fine.

So the question is, which system is more entropic? Depends on what kind of chaos you want. Capitalism relies on the incentive for all people to find a need people have and fill it. It doesn't discriminate on the morality of that need, but even so, capitalism sees the evaluation of society's needs as a need unto itself.

Marxism operates under the assumption that people put their needs aside for the good of other people. The idea here is that the needs will be addressed by somebody elses idea of what the needs are going to be for a society. So I guess the degree of entropy in a marxist society is proportional to the gap between the needs you planned for, and the needs you didn't.

In a capitalist world, there is no need that doesn't really go unfulfilled. In a marxist world, there is quite a lot of needs that go unheeded.

Marxism gives you apparent order like a can of shaken up soda pop does. Pull the tab and you get a snootfull of soda pop.

[harpseal]

I say, these measures might help, but even after that, we still have a big problem.

I did not say this would fix every problem in the USA but it is a start at fixing the economy.

I stills say, we must consume less or work more or some combination which is unpalatable to the US public.

I will agree to teh extent that it would be better to save (invest) more rather than consume. But the current income tax structure doscourages that on both a personal and a corporate level. As to the work more overall it is difficult to find on average a more productive and harder working person than the average American worker. Yes the wages are high relative to other nations but the fact that more has not already left means we are still dealing on the margins and small changes in teh investment climate will have large results.

I think we can get a bit of a free lunch by simplifying or eliminating the income tax code, tort reform, reducing govt. spending taxation and regulation. After that, the free lunch stops.

That is not a free lunch that is encouraging business investment. have some faith in the Free market and the fact the American Market is probably the most free in the world.

[reed_inthe_wind]

NAFTA is supose to slow down Chinese imports to the U.S.A. What can we do to juice up North American trade?

Tariffs against Chinese goods will prop up other Asian economies. How will China respond to tariffs; will they threaten action against other Asian countries?

Can China be slowed by supporting change from within China?

If these people are serious about a trade war with China, should we be buying gold or other commodities?

[reed_inthe_wind]

NAFTA is supose to slow down Chinese imports to the U.S.A. What can we do to juice up North American trade?

Tariffs against Chinese goods will prop up other Asian economies. How will China respond to tariffs; will they threaten action against other Asian countries?

Can China be slowed by supporting change from within China?

If these people are serious about a trade war with China, should we be buying gold or other commodities?

[hedgetrimmer]

China leads dumping list
The United States is China's No. 1 trade partner, followed by the Chinese region of Hong Kong. Two-way trade between the United States and China hit $80.5 billion in 2001, Chinese customs figures show.

China also consistently runs a large trade surplus to the United States.

China's exports to the United States rose 4.2 percent in 2001, to $54.3 billion. U.S. trade to China leaped 17 percent to $26.2 billion.

A WTO report released this week states that China is the country most often investigated for claims of illegal dumping, selling goods below cost overseas.

China was named in 25 cases over six months, the WTO found. The United States was second, with nine cases, tied with Brazil, Hong Kong and Thailand.

http://edition.cnn.com/2002/BUSINESS/asia/04/23/china.ustrade/

[hedgetrimmer]

I thought Congress determined whether or not there would be tariffs. It the president favoring dry cleaners or wire hanger manufacuturers? Is this another indication that the service economy is more important than the manufacturing economy to the president?

---

Bush Rejects Tariffs for Wire Hanger Imports from China

THE WHITE HOUSE
Office of the Press Secretary
April 25, 2003

Memorandum for
The Secretary Of Commerce
The Secretary Of Labor
The United States Trade Representative

SUBJECT: Presidential Determination on Wire Hanger Imports from the People's Republic of China

Pursuant to section 421 of the Trade Act of 1974, as amended (19 U.S.C. 2451), I have determined the action I will take with respect to the affirmative determination of the United States International Trade Commission (USITC Investigation TA-421-2) regarding imports of certain
steel wire garment hangers from China. After considering all relevant aspects of the investigation, I have determined that providing import relief for the U.S. wire hanger industry is not in the national
economic interest of the United States. In particular, I find that import relief would have an adverse impact on the United States economy clearly greater than the benefits of such action.

The facts of this case indicate that imposing additional tariffs on Chinese imports would affect domestic producers unevenly, favoring one business strategy over another. While most of the producers would likely realize some income benefits, additional tariffs would disrupt
the long-term adjustment strategy of one major producer, which is based in part on distribution of imported hangers, and cause that producer to incur substantial costs.

In addition, most domestic producers, including the petitioners, have begun to pursue adjustment strategies. While these strategies have included consolidation, modernization of production facilities, and
expansion into complementary products and services, domestic producers are also expanding their use of imports. Indeed, a substantial part of the surge in imports during the most recent period measured was brought in by domestic producers themselves, including the petitioners.

Moreover, after 6 years of competing with Chinese imports, domestic Producers still account for over 85 percent of the U.S. wire hanger market. With this dominant share of the market, domestic producers have the opportunity to adjust to competition from Chinese imports even without import relief.

Furthermore, there is a strong possibility that if additional tariffs
on Chinese wire hangers were imposed, production would simply shift to third countries, which could not be subject to section 421's China-specific restrictions. In that event, import relief would have little or no benefit for any domestic producer.

Additional tariffs would have an uneven impact on domestic
Distributors of wire hangers. For some distributors, the tariffs would likely lead to some income benefits. However, the tariffs would likely harm other distributors in light of their business models.

Additional tariffs would also likely have a negative effect on the Thousands of small, family-owned dry-cleaning businesses across the United States that would either have to absorb the resulting increased costs or pass them on to their customers.

The circumstances of this case make clear that the U.S. national economic interest would not be served by the imposition of import relief under section 421. I remain fully committed to exercising the important authority granted to me under section 421 when the circumstances of a particular case warrant it.

Section 421 is not the only avenue available to the petitioning domestic producers as they seek to adjust to import competition. I hereby direct the Secretary of Commerce and the Secretary of Labor to expedite consideration of any Trade Adjustment Assistance applications received from domestic hanger producers or their workers and to provide such other requested assistance or relief as they deem appropriate, consistent with their statutory mandates.

The United States Trade Representative is authorized and directed to publish this memorandum in the Federal Register.

GEORGE W. BUSH

[hedgetrimmer]

Link to previous is
http://hongkong.usconsulate.gov/uscn/wh/2003/042501.htm

[harpseal]

I would say that given China's tariffs that there should be an overall 70% tariff on any Chinese good coming to the USA. simple and to the point until they open their markets to US goods including dropping their 70% tariff letting the Yuan float and removing non-tariff barriers.