英国指导assignment：中国与美国新贸易争端

英国指导assignment：中国与美国新贸易争端

China And US New Trade Dispute 

 

商务部称，有人担心美国的进口对国内工业造成了打击，这是美国对中国轮胎进口关税以弥补因轮胎进口激增而造成的市场混乱。

该案是中国与美国最近的一系列贸易争端中的最新情况。

中国当局在一份声明中说：“符合国家法律和世界贸易组织的规定，商务部已开始对一些进口的美国汽车产品和鸡肉进行反倾销和反补贴审查”。

 

The Commerce Ministry said there were concerns the US imports had "dealt a blow to domestic industries It comes a day after the US imposed tariffs on Chinese tyre imports in order "to remedy a market disruption caused by a surge in tyre imports". 

 

The case is the latest in a series of recent trade disputes between China and the US. 

 

"In line with national laws and World Trade Organisation rules, the commerce ministry has started an anti-dumping and anti-subsidy examination of some imported US car products and chicken meat," the Chinese authorities said in a statement. 

 

China has called the tyre move by US President Barack Obama "protectionist". 

 

The White House announced duties of an additional 35% on Chinese-made tyres for one year, followed by tariffs of 30% and 25% in the following two years. 

 

While Washington has long accused China of trade protectionism, the US is also unhappy at the high volume of Chinese exports to America, accusing Beijing of deliberately keeping the Yuan undervalued to make its exports artificially cheap. 

 

The US trade deficit with China totalled $103bn (£63bn) in the first half of 2009, down 13% from the same period last year. 

 

This article is about protectionism and a trade dispute between China and America and their non-practice of free trade. After the US imposed tariffs on Chinese tyre imports, the Chinese government initiated an "anti-dumping and anti-subsidy" investigation on some imported US car products and chicken meat. 

 

'Dumping' in economics refers to a product that is sold abroad at a price below average cost. 

 

A subsidy is a payment made by the government to firms intended to lower costs and price thus increasing production and consumption of the product along with firm revenues.

 

 

P1 and Q1 make the equilibrium price. After the government grants a subsidy, the price drops to P2 and consumption increases to Q2. AB is the amount of the subsidy. And the green shaded area shows the amount the government has spent on the subsidy. P1P2 is the amount of the subsidy passed on to consumers in the form of a lower price and P1P3 is the amount of the subsidy the producer takes on in the form of extra profit. 

 

Free Trade refers to international trade that is not subject to any type of trade barriers. 

 

A tariff is a tax on imports as a result of which the domestic price of product rises, the level of domestic production rises, the level of domestic consumption drops and the volume of imports is restricted. A tariff also generates revenues for the government

 

 

At P1 domestic firms will offer Q1, while domestic demand will be at Q2, and imports will be Q1Q2. If a tariff is imposed, P1 will rise to P2, domestic production will increase from Q1 to Q3, and consumption/demand will fall from Q2 to Q4, therefore decreasing imports to Q3Q4. Government revenue will be ABCD, the shaded area. 

 

The US imposed these tariffs due to long term accusations of trade protectionism and China "deliberately keeping the Yuan undervalued to make its exports artificially cheap". Most countries have floating exchange rate which lets the foreign exchange market determine the exchange rate, but the Chinese government runs a fixed exchange rate. 

 

As China has a large trade surplus, the country can keep the Yuan undervalued by getting China's central bank to buy US dollars more or less equal to the amount of the trade deficit the US has with China, which according to the article is $103 billion. This keeps the price of the US dollar high and the Yuan low. 

 

In the past, China use to simple tie the Yuan to the dollar, an example being at around 7 Yuan to the dollar, but now with the Yuan undervalued, China can continue to enjoy the high profits as the exchange rate is fixed between a very narrow band which could be between 6.8 or 6.9 Yuan to the dollar. Keeping the Yuan undervalued is how China harvests its growth, as the value for the Yuan drops lower, the better it is for exporters from China. For example is exchange rate is 6 Yuan to the dollar, and a Chinese exporter sells a pair of pants in the US for 10 dollars, the exporter receives 60 Yuan, but if it was only 4 Yuan to the dollar the exporter would only receive 40 Yuan, therefore keeping the Yuan undervalued brings in higher returns for Chinese producers.