But Chinese enterprises would not be the only ones to suffer. There are more than 200 commission agents and over 43,000 retailers in the U.S. engaged in the business of importing tires from China, with about 100,000 jobs generated. Once the U.S. shut the door on Chinese-made tires, the result would be American lay-offs.
Since the introduction of the measure Guangzhou South China Tire & Rubber Co., Ltd. has had to cut from four shifts per day to three, the equivalent of reducing its workforce by one-fourth. Last May, Nie Ji, a technician with the company, was part of the "truth-telling" delegation, a CPAFFC organized group of representatives that went on a lobbying mission to the U.S. He told congressmen that China had become the biggest producer and exporter of tires, that the tire industry is a traditional labor- and technology-intensive industry, and a major job provider. He presented the case that China-made tires target the low and middle sections of the market whilst U.S-made tires target the high-end. Furthermore, there are no similar production facilities in the U. S. so China-made tires have nothing to do with dumping.
The U.S. Tire Industry Association indicated that several years ago U.S. tire producers had decided to transfer production of low-end products overseas, and that a three-year temporary tariff would not cause them to change their business plans. So, Obama's decision would not create jobs, but would pose a heavy burden on U.S. tire dealers and consumers instead. Tire importers and dealers would have to cut jobs due to the increasing loss, and consumers would face higher prices and less choice.
Congressman Dave Reichert from Washington State and Dean Heller, a republican congressman from Nevada, agreed with much of this and stressed the importance to the U.S. of free trade and free competition.
"Trouble always comes in sets," as the saying goes. On December 31, 2009, the United Steelworkers, together with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), plus four companies in Texas, filed a petition to the U.S. Commerce Department and U.S. International Trade Commission (ITC), demanding an anti-dumping and anti-subsidy investigation against imported drill pipes from China. On April 9, 2010, the U.S. Commerce Department proposed the imposition of a 25-99 percent tariff on China's steel pipe producers. Shanxi Huanjie Petroleum Drilling Tools Co., Ltd. was one of the blacklisted companies; its president Gong Jinwen also joined the "truth-telling" delegation in April 2010.
Huanjie is a share-holding company established by Gong Jinwen with seven of his former schoolmates. It was the fourth Chinese enterprise, and also the first Chinese private enterprise, to win certification from the American Petroleum Institute (API). It had start-up capital of just US $2,000, but now has assets worth US $30 million and 2,000 employees. Huanjie exports 40 percent of its drill pipes to the U.S. and supplies nearly all of the world's oil companies. Huanjie is one of a host of Chinese private enterprises since China's accession to the WTO to grow rapidly by learning Western market rules.
"Twelfth Washington Street – I remember it clearly. For nine whole days we made no progress and I was desperately anxious," said Gong. "On day 10, I got to meet with the API President. Hearing my views, he told me I was the first Chinese entrepreneur to come there to lodge a complaint on his own initiative." The next day, the API gave a hearing especially for Gong Jinwen. One month later, Gong's company regained AIP certification.
"In Washington D.C., lobbying is known as 'Washington's top industry,' and the lobbying system is very mature. If you use the system right it can be amazingly effective," said Li Xiaolin.
When the delegation returned to China, Gong Jinwen remained behind and, together with his company's American lawyers, continued to communicate and negotiate with such institutions as the U.S. International Trade Commission (ITC) and the U.S.-China Business Council. Gong's company has since won the chance to challenge for special case treatment on the tariff, which will mitigate the losses it incurred due to the trade dispute. This example fully manifests the importance of face-to-face communication between the industries of our two countries.
According to Li, of the six congressmen the Chinese "truth-telling" delegation met in April 2010, only one had ever visited China, and that was back in 1985; the rest had never been and knew little about China's development. However, all six attached high importance to U.S.-China relations and indicated their intention to intensify trade cooperation. Unfortunately, they were ignorant of the true nature of Chinese enterprises, and just stuck obstinately to the line that Chinese exports were injurious to U.S. employment and its economy. At the same time, those congressmen openly admitted the U.S.-China trade dispute served the needs of U.S. politicians as mid-term elections approached; trade issues were inevitably caught up in domestic politics.
Li and members of the delegation repeatedly argued, "It is China's private enterprises that are bearing the brunt of U.S. trade sanctions, and these private enterprises are China's emerging economic units – beneficiaries of free competition and the laws of the market economy. In other words, the U.S. government is adopting methods that violate the principle of free competition to harm the beneficiaries of the free market principle."
"We hold the opinion that trade issues should not be politicized," said Li. "But trade friction will harm the essential content of bilateral relations and both sides will end up getting hurt. The Chinese market is very important for the U.S. I quoted President Bush senior speaking at a seminar on U.S.-China relations to the effect that what can truly hurt the bilateral relations are trade disputes, which fundamentally damage the interests of both peoples. The U.S. representatives agreed with this point."
"There is wide recognition that China-U.S. bilateral relations are important," Li continued. Congressman Geoff Davis expressed his opinion that in the next 100 years, the U.S. and China would be the world's superpowers. Although he had not been to China, he had worked in Africa and was impressed by the parliament buildings and hospitals China constructed there. Congressman John Yarmuth remarked that the bilateral relations should advance in a mutually beneficial direction. He had been told by the president of the fast food giant KFC in his constituency that KFC's brisk development owed much to the burgeoning Chinese market. Congressman Dave Reichert said Washington State is the only American state to have a trade surplus with China. It is home to many big corporations such as Microsoft and Boeing that have close ties with China, so healthy U.S.-China economic and trade relations will be of great significance for that northwestern state.
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