Thread: China Announces 105% Tariffs on Chickens in Retaliation for

Sunday, February 07, 2010

China Announces 105% Tariffs on Chickens in Retaliation for US Steel and Tire Tariffs

In Steel Tariffs Show Protectionism On The Rise, I noted that 145% steel pipe and steel grating tariffs would bring a reaction from China. http://globaleconomicanalysis.blogspot. ... sm-on.html

Who Benefits From This?

Essentially no one. Potentially a few hundred steel workers get jobs back, but everyone using those products has to pay more. Demand will slow and price pressures will increase on everyone using those products. In aggregate, more jobs will be lost as a result of these tariffs than gained.

And that is just on the surface. Think China will not react? A nice clear message would be for China to cancel plane orders from Boeing or industrial goods from GE. Even if China is not so overt in its message, it is foolish to think there will be no repercussions over this.

The rising tide of protectionism is not a good thing. It never is.

105% Tariffs On US Chickens

Retaliation for 145% steel tariffs (on top of huge tire tariffs) has arrived: China announces anti-dumping steps on US chicken. http://finance.yahoo.com/news/China-ann ... 0.html?x=0

China announced anti-dumping duties of up to 105.4 percent Friday on imports of U.S. chicken products, adding to trade strains with Washington.

The case comes amid mutual accusations of protectionism by Beijing and Washington which both say will hurt efforts to end the global economic downturn.

A preliminary investigation concluded U.S. exports were being sold at improperly low prices that harmed Chinese competitors, the Commerce Ministry said. It said importers must post a bond until a final decision is reached.

Beijing launched the investigation in September after Washington raised duties on imports of Chinese-made tires despite vigorous opposition from China.

The two governments also are embroiled in disputes over access to each other's markets for steel pipes, movies and books and other goods.

The chicken duties take effect Feb. 13 and apply to whole birds, chicken sausage and other products, the Commerce Ministry said. Included are chicken feet, which most Americans throw away but which are a delicacy in southern China.

Companies that appealed the ruling will pay lower duties of 43.1 percent to 80.5 percent, the ministry said. Tyson Foods Inc. will be charged the lowest rate, while Pilgrim's Pride Corp. is at the top end of that range.

Importers that did not appeal will be charged 105.4 percent, the ministry said.

Tire Tariff Recap

This all started with tires, and the irony of tires is US manufacturers did not even want protection.

In what is widely considered a test case of the president's union support, Obama slaps duties on tire imports from China
http://www.reuters.com/article/politics ... dChannel=0
U.S. President Barack Obama slapped steep additional duties on tire imports from China on Friday in a move that pleased domestic labor groups but drew a strong rebuke from Beijing.

The United Steelworkers union, which represents workers at many U.S. tire production plants, filed a petition earlier this year asking for the protection. It said a tripling of tire imports from China to about 46 million in 2008 from about 15 million in 2004 had cost more than 5,000 U.S. tire worker jobs.

The ITC had recommended starting with a 55 percent tariff that would fall to 45 percent in year two and 35 percent in year three. The steelworkers asked initially for a quota of 21 million that would grow by 5 percent each year.

Analysts expect Friday's action to encourage other labor groups or domestic manufacturers to seek relief under Section 421, which does not require petitioners to prove unfair trade practices are responsible for a surge in imports.

No American tire manufacturer supported the case and one, Cooper Tire, publicly opposed it.

Tire Tariffs Seen And Unseen

Flashback September 14, 2009: Obama Risks Global Trade War With Misguided Tariffs http://globaleconomicanalysis.blogspot. ... -with.html

First steel, now tires. Let's see how China responds. China might put import duties on meat hurting US farmers, or perhaps they decide to buy planes from Airbus instead of Boeing. Perhaps they simply buy fewer planes from Boeing.

For now let's assume 5000 jobs would be "saved" by this measure. Let's total up the gains and losses from the Tariffs.

Gains From Tire Tariffs

* 5,000 Jobs


Losses From Tire Tariffs

* China reduces orders for planes and/or imposes agricultural tariffs in response. China will retaliate somehow those are possible examples how.
* Costs go up as production shifts from China to US or elsewhere.
* Millions of US consumers temporarily have to pay unnecessarily high prices for tires as long as normal supply chains disrupted.
* Fewer dock workers are needed as both imports from China and exports to China drop


Let's revisit those gains. Does anyone really think 5,000 jobs are coming back to the US as a result of this action? Better yet, did we really lose 5,000 jobs in the first place as a result of tire imports from China?

Let's explore those questions with a look at tire production.

Tire Production Before And After Tariffs

The Washington Post article As Cheaper Chinese Tires Roll In, Obama Faces an Early Trade Test http://www.washingtonpost.com/wp-dyn/co ... 9090800233 has a graph of tire production. I duplicated the chart and doubled it up showing what I believe to be the before and after effects of the tariff. Annotations in blue are mine.



Tire workers gained nothing as manufacturing will shift somewhere else. However the price of tires is likely to rise up on account of production disruptions.

Arguably 5,000 steel workers saved jobs. However, those jobs come at the expense of higher prices on buyers and also at the expense of chicken farmers forced to bear the brunt of retaliation.

Think anything is gained by Tariffs?
Think again.

This has a chance of escalating way out of control if Obama decides to label China a currency manipulator.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot. ... ckens.html

Time to really boycott anything made in China, and perhaps time to figure out some good recipes for chicken feet. I have read earlier that many Chinese prefer American chicken feet as they are fatter than those locally grown.
In 2004, I read an article quoting WSJ saying that 88% of our seafood is now imported. That and the spike in fuel prices basically has killed local seafood industries. Unfortunately, the American public is in the middle, knowing well that with this administration, we will have no rational solution.

Time to really boycott anything made in China, and perhaps time to figure out some good recipes for chicken feet. I have read earlier that many Chinese prefer American chicken feet as they are fatter than those locally grown.
In 2004, I read an article quoting WSJ saying that 88% of our seafood is now imported. That and the spike in fuel prices basically has killed local seafood industries. Unfortunately, the American public is in the middle, knowing well that with this administration, we will have no rational solution.

COSTCO is bad about seafood being imported... I will not buy it .. it can rot on the shelf. Get out of the Global system or it will be the death nail in America's coffin

I saw something on television about Americans eating less from inside the United States, and then they showed a lab checking food coming from in Mexico, checking for E Coli, etc. I still do not understand why we have such a difficult time finding foods marked USA. I request those, but foreign pressure and cheap goods and other arm twisting leaves us with the hunt for American made goods and foods.

Where does our food go?

Psalm 91

I support protected trade. I support raising the tariffs to save good jobs in our country. We need tariffs on many many many more products to balance these outrageous trade deficits we have with many countries not just China although our deficit with China is the worst of any, but it's not just China it's the whole world sucking US dry as a bone.

To illustrate how low we've sunk, we import tires, steel, computers, machinery, and equipment from China. We raise tariffs on tires and steel and so in response China raises tariffs on what we sell to them. So China looks around to see what they can raise a tariff on that we sell to them, so what does the greatest superpower the world has ever known sell to China?

Chickens.

And to add insult to injury half of those chickens were plucked and cut-up by illegal aliens.



Don't let the free trade traitors scare you off of protected trade, folks. It'll take a process to get it balanced, to work through the bugs, and get it right, but on these actions of raising these tariffs which are steps towards restoring protected trade policies, put every other dispute you have with this President aside, and support this change in direction to restore protected trade policies. He's not doing this because he wants to, he's doing it because our AMERICANS are demanding it. And don't trust me on it. Trust the 250 year history of the American Economic System that relied on protected trade policies to build the greatest economic superpower the world has ever known and it was free trade policies that destroyed it in less than a decade.

The Free Trade Traitors will be spewing lies, myths, distortions and falsehoods just like the Open Borders Lobby does on illegal immigration. Pay them no mind, tell them to either shut up and go jump off a bridge OR open a new plant in the US, because they are in fact the no-good low-down lying-ass pond scum traitors who kidnapped the US economy that took Americans over 250 years of risk, sweat, blood and tears to build under protected trade policies and used free trade treason to destroy that economy representing 10 generations of work, toil, production, invention, innovation and achievement and bankrupted it in less than 10 years.

This is great news about the new tariffs and a sign protectionism, not isolationism as some will claim, don't let them fool you by confusing the two, is on its way back! Of course, there's much more to do, we have to do all the steps. You must remember what they are, so write them down, grab a magnet and stick them on the refrigerator so we never forget:

Judy's Five Step Plan To Fix Our Economy:

1. stop illegal immigration
2. pass the FairTax
3. protect our trade
4. legalize/regulate/tax under 2 the illegal drug trade
5. drill baby drill

And watch US soar to the top again. This is going to be one of the most exciting and rewarding accomplishments the American People have ever achieved for themselves and future generations.

The Chinese labor force is so big, that if the U.S. sent all of it's manufacturing to China, there would still be a labor surplus. The Chinese Army is becoming huge with all of those male babies they have been producing... and what will they do with their gigantic Army?

Originally Posted by JohnnyYuma

The Chinese labor force is so big, that if the U.S. sent all of it's manufacturing to China, there would still be a labor surplus. The Chinese Army is becoming huge with all of those male babies they have been producing... and what will they do with their gigantic Army?

China should develop its own economy for its own benefit and produce for its own people so they can have better lives, better incomes, better homes and enjoy the many products they produce for their own market which is much larger than ours and can provide them with a much stronger economy than trying to be an export slave nation to the US.

I agree. I like American Made myself. It is always made with the highest standards of quality.

My food is American made. Game off the land, and locally grown veggies, until I plant a garden this year.

Trouble is, the nation has been sold out, and we the people have been sold down the river to the highest bidder.

Originally Posted by Judy

I support protected trade. I support raising the tariffs to save good jobs in our country. We need tariffs on many many many more products to balance these

I totally agree, the only thing we have to watch out for is the dues from those newly rehired workers going straight to ACORN and the SEIU.