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More upsetting news about trade battles between China and the US. Last time it was tires, now it is steel pipe. The International Trade Commission gave approval for an import tariff of 10 to 16% on Chinese steel pipe.

Maybe not that much to be afraid of. The International Trade Commission is not international at all, but an independent federal agency that only gives advice to congress and the white house. They themselves have no legislative power, so the news is not that bad, though the commerce department has approved the tariff.

The United Steelworkers union, which was the driving force behind the tires case, joined with the Maverick Tube Corporation, the United States Steel Corporation and other American manufacturers in asking for import duties on Chinese-made pipe.

No surprise of course that American steel and pipe manufacturers are pushing for the tariffs. What I don’t understand is where are the American oil companies? The oil companies and their customers will be the ones paying the higher prices that result from the tariff.

The real fear is that the US is going to go even further with protectionist policy, and many countries will follow in retaliation. Like during the Great Depression, protectionism gets politically easier during hard times, and you can not get any more counterproductive.

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  1. The consequences of USA’s action could initiate a devastating trade war between the two biggest economies in the world.
    If foreign countries cannot receive American dollars for their products, they will not be able to use American dollars to purchase American goods and services. Then, dollars that flow out of the country must finally flow back into the country. And trade restrictions may lead to retaliation, which harms all parties.
    Looking for more details of it, see my coursework 3.
    Happy New Year!!!

    • This time it is really serious. The comment above is cited content from my coursework #3. If you have any problems with it please contact Hong Boqiang(Parker) by sending email to following address:

  2. Hah! We started to study chapter 4 yesterday. I believe I can know more about the importance of international trade in this chapter. As far as I know, protectionism is bad for one country to get Comparative Advantage. That means countries can’t specialize in the production of goods they produce best. The United Steelworkers union and American manufacturers may be afraid of the market will be too competitive when goods of China are imported. Therefore, they want to increase the tariff to prevend this situation. However, every country should focus on cooperating which is beneficial to the economy in the whole world.

  3. It is interesting to find that the loser between China and the US in the economic and financial field is always China…

  4. Under the situation of financial crsis, it is fitting and proper that U.S. shouuld do this (protectionism,tariff).However, from China’s point of view,the steel pipe tariff is just a single case, which means it doesn’t have to follow any pattern, And I think there is no need to make further assumptions.What’s the next?Shoe?Toys?or Chinese Students?We ain’t konw.


  5. HAPPY NEW YEAR!2010 is coming as We are colse to 2012!

    As we all know that China has a low labour cost all over the world.From my perspective,using the tariffs US has 2 reasons.One is political,they may want to exert some pressure on China.It just outside of the Economics,so we don’t care about it.The other reason I think is to keep a place for domestic steel pipe’s market in the competition against China’s steel pipe’s market.US steel pipe’s market has to sell a good below cost, dut to the low cost of China,which is refered to dumping.So US uses tariffs as a kind of protectionism is for anti-dumping.

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