In Big Shift, U.S. Imposes Tariffs on Chinese Paper (NYT)

[Omaha Steve]

In Big Shift, U.S. Imposes Tariffs on Chinese Paper

By STEVEN R. WEISMAN
Published: March 31, 2007

WASHINGTON, March 30 — The Bush administration, in a major escalation of trade pressure on China, said Friday that it would reverse more than 20 years of American policy and impose potentially steep tariffs on Chinese manufactured goods on the ground that China is illegally subsidizing some of its exports.

The action, announced by Commerce Secretary Carlos M. Gutierrez, signaled a tougher approach to China at a time when the administration’s campaign of quiet diplomacy by Treasury Secretary Henry M. Paulson Jr. has produced few results.

The step also reflected the shift in trade politics since Democrats took control of Congress. The widening American trade deficit with China, which reached a record $232.5 billion last year, or about a third of the entire trade gap, has been seized upon by Democrats as a symbol of past policy failures that have led to the loss of hundreds of thousands of jobs.

Mr. Gutierrez’s announcement has the immediate effect of imposing duties on two Chinese makers of high-gloss paper, one at 10.9 percent and the other 20.4 percent, calculated by adding up the supposedly illegal subsidies.

But trade and industry officials say future actions based on the department’s new policy could lead to duties on imports of Chinese steel, plastics, machinery, textiles and many other products sold in the United States, if as expected those industries seek relief and the department finds that they are harmed by illegal subsidies.


Joe Everline, 50, a worker at Luke Paper in Luke, Md., labels paper reels. The company employs about 1,000 workers.

Indeed, industry and administration officials say that they chose the high-quality paper industry last year to serve as a test case for a sweeping revision of the administration’s previous policies, which did not allow for antisubsidy duties for Communist or other nonmarket economies.

Mr. Gutierrez said that the administration’s step was based on careful study of Chinese subsidy practices and was being carried out irrespective of any pressure from Congress.

“This is simply an application of our law,” he declared. “The message that we have been sending all along to all of our trading partners is that we want fair trade and that we will use every tool at our disposal to guarantee that our workers and our companies have a level playing field.”

A spokesman at the Embassy of China, Chu Maoming, said in Washington that China expressed “strong objection” to the Commerce Department announcement, which he said sets a bad precedent that could damage China-United States relations.

“The Chinese side strongly urges the U.S. side to reconsider the decision and reverse it as soon as possible,” he said.

The stock market at first reacted negatively to the news, on fears that a trade war with China could erupt, harming the dollar as well as stocks of companies that rely on trade with China. But stocks later recovered, ending the day barely changed.

Beyond seeking a review of the new policy in coming months, China is expected to challenge it in federal court and also at the World Trade Organization, but not through imposing tariffs of its own on American goods, according to lawyers who have been representing China in the dispute.

Under W.T.O. rules, China must seek recourse through the courts or the W.T.O.’s adjudication process if it hopes to get the new tariffs declared illegal.

FULL 2 page story at link.

[whistle]

1. How about banning products with Chinese wheat gluten?

[shain from kane]

2. Back to wiping with corncobs. Earlier story said US farmers will be planting more corn. Got to

admire them for stepping in the breach.

[Igel]

5. Mostly hi-end or glossy paper, IIRC.

This has been bobbing in the news for the last month.

[madrchsod]

3. 20 years of watching china and the us government

fucking over the american worker , i guess i`ll have to accept one small victory

[DCKit]

4. Of course it's paper

If they banned plastic goods, Wal Mart would have to close up shop, electronics and all the big box stores would close.

[Skink]

6. Can we bomb Iran yet?