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China slapped with tubing tariff sign of deepening depression

chinese currency has dollar cornered
chinese currency has dollar cornered

“The Chinese side expresses strong dissatisfaction and resolute opposition to this ruling,” the Commerce Ministry said Thursday in a release. It called on Washington to “correct its mistake” and avoid trade protectionism.

For years analysts have predicted that the U.S. would begin imposing trade barriers on imports from China now that China stopped buying Treasuries from the United States. There is no surprise about these recent indications because in recent auctions of U.S. Treasury, the Chinese were either absent or have bought very little of U.S. debt. It will still get much worse quickly and then inflation will follow. If you’re one of those critical of imports from China, then you will also whine when inflation begins.

The United States quickly will find they will not be able to intimidate the Chinese how they have Canada in terms of violating international trade agreements. The Chinese will not wait years for international tribunals to resolve this issue, they will simply retaliate. Given the state of the economy of the 2 countries, it is not a battle the United States can win.

Reading through much of the Internet chatter, there are a lot of protectionist rhetoric. Protectionism is great until that other country “protect” their economies from exports. Remember – Canada is a net exporter, and if they are to maintain their standard of living they will need to continue to export more than they import. For this reason, our government can not afford to engage in protectionist policies. However, if manufacturing were to return to Canada and became more of its less than 15% of the total economic pie, it would balance Canada’s economy out and become much more sustainable. After all, manufacturing and resource extraction provide wealth for a nation, while services are largely a system of redistribution of wealth.

Having said that though there is nothing wrong with people acting individually and in supporting local businesses and avoid buying cheap products imported from places like Walmart or dollar stores.

If China has sold all its U.S. bonds, it would greatly devalue the U.S. dollar, and thus harm the commercial interests of China. In addition, they would then take a big loss on these holdings. Indeed, they are likely to sell their holdings at a measured pace.

China should revalue its currency, which would reduce these trade wars. It would also give Chinese people a bigger slice of the pie. But for some reason, the Chinese government does not do that. It is time for the people of China begin to ask!

China bristles at U.S. pipe tariff
Last Updated: Thursday, December 31, 2009 | 2:24 PM ET
The Associated Press

China is criticizing a U.S. decision to slap antidumping duties on Chinese-made steel pipes, demanding that Washington reverse the move and saying its goods are no threat to American producers.

The U.S. International Trade Commission’s decision will affect Chinese exports worth about $2.8 billion US, resulting in the biggest steel trade dispute in U.S. history.

“The Chinese side expresses strong dissatisfaction and resolute opposition to this ruling,” the Commerce Ministry said Thursday in a release. It called on Washington to “correct its mistake” and avoid trade protectionism.

The ITC voted Wednesday to impose duties of 10.36 to 15.78 per cent on the pipes, used mostly in the oil and gas industries. That is intended to offset government subsidies it said China provides its steelmakers.

Beijing and Washington are embroiled in a string of disputes over access to each other’s market for tires, pipes, movies and other goods. They have accused each other of improperly trying to support their producers despite a pledge by global leaders to avoid protectionism in response to the economic crisis.

The Chinese statement said that if the U.S. panel failed to take the crisis into account as the source of American companies’ problems, “then it is a mistake to say Chinese oil pipes are harming American producers.”

“Chinese exports of oil pipe to the United States cannot be causing injury or threats for American producers” because the energy industry is growing and demand for pipe is rising, the statement said.

You can read the full story at Associated Press

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