Obama Downplays Possibility of Trade War with China

Bloomberg reports that U.S. President Barack Obama believes that the tariffs slapped on imported tries from China would not result in a trade war.

 

“We’re not going to see a trade war,” says Obama in an interview with Bloomberg News. “We’ve got to establish credibility and enforcement of the rules precisely because I want to further expand trade, and that is something that I think the Chinese government should understand.”  On September 11, Obama announced that he will impose duties of 35% on $1.8 billion of automobile tires from China, in response to a petition by the United Steelworkers union.

 

According to Bloomberg, China, which called the tariffs an “abuse,” filed a complaint with the World Trade Organization and announced it would probe whether U.S. chicken and auto products are being dumped at below-market prices or receive unfair government subsidies.

 

In a statement obtained by Bloomberg, Zhong Shan, the vice minister of China’s Ministry of Commerce says that his government is concerned about the negative effects of Obama’s decision on China’s exporters and will help tiremakers overcome the difficulty.

 

Speaking to Bloomberg, Robert Kapp, a business consultant specializing in China warns that Obama’s actions may encourage U.S. producers of other goods to file similar petitions against products from China, and provoke China to retaliate against U.S. companies trying to do business there.
 

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