Trade war watch: China threatens 30 percent tariff on U.S. nylon
Filed under: Economy
Nylon seems like an innocuous enough product, but the material used to make goods like rope and pantyhose appears to have pushed the United States and China closer to a full-blown trade war.
Accusing U.S. nylon manufacturers of dumping Nylon 6 on the Chinese market, China's Ministry of Commerce has made a preliminary decision to impose a steep 30 percent tariff on the material -- also known as polycaprolactam -- the agency's website says.
The People's Republic said "Nylon 6 is widely used in the manufacture of hosiery, knitted garments, threads, ropes, filaments, nets and tire cords."
The U.S. is not the only country getting hit with a tariff on this special type of nylon. Smaller ones will be imposed on the European Union, Russia and Taiwan, the agency says. But as the U.S. and China have already had their share of recent trade dust-ups, this latest action suggests the two countries may be headed for an out-and-out trade war. The Obama Administration has already imposed a tariff on Chinese rubber imports. And China is looking into whether American chicken suppliers are dumping chickens into its markets.
It is not clear what the tariffs are costing businesses in the U.S. and China. What is clear is that new tariffs and investigations are starting every few weeks.
The conflicts are likely to escalate as China's economy continues to grow much faster than America's. Part of the promises made by Barack Obama during his campaign included looking after the interests of labor and the American workforce. To make good on that, he may have to become increasingly aggressive about keeping inexpensive goods from China out of U.S. markets.
The Chinese are bound to retaliate, although they will never say that. But, if the tariffs continue to mount on both sides, it will become evident that rubber and nylon are not just rubber and nylon. They are part of broader policy decisions to protect national economic interests
Douglas A. McIntyre is an editor at 24/7 Wall St.



























Reader Comments (Page 1 of 5)
10-20-2009 @ 7:17AM
Ben Gee said...
A trade war between US and China will reduce trade between the two countries. This will hurt both countries. It is like two people fighting, both will get hurt. No one win in a fight, it is how much each lose.
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10-20-2009 @ 7:14AM
GEORGE said...
CHINA MAKES A LOT OF INFERIOR LOW COST PRODUCTS. HOW MANY TOYS AND OTHER JUNK SHALL WE ACCEPT. SHOW ME WHAT CHINA BUYS FROM US OTHER THEN OUR TREASURY SECURITIES. MAKE ME BELIEVE THAT ALL THE ENERGY USED TO SHIP CHINA PRODUCTS ALL OVER AMERICA AND OTHER COUNTRIES IS WORTH THE POLLUTED USE OF OIL AND GAS TO DELIVER IT.
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10-20-2009 @ 11:31AM
KNUTE9 said...
I believe Chinese economic data as much as I believe their government controlled news outlets.
10-20-2009 @ 2:46PM
Will said...
We import $650 billion from China and export $425 Billion, mostly Boeing planes, Catapiller Earth Movers, and other high end high quality products. Of course, with the Obama tire move, those orders will cease in a very few months as China builds their own capacity (with American capitalist assistance).
10-20-2009 @ 2:01PM
amoozed said...
The US sources many cheap products from China and other Asian countries that have lower labor costs than the US. China produces many hi-tech products, too. Intel computer chips come from Chengdu, China, for instance.
In the 1950's, everybody said Honda motorcycles were made of tin cans. Obviously, Honda, Toyota, Mitsubishi, and Hyundai have overcome that misconception.
We need to decide if this global economy our government is hailing actually benefits the American people or just big business and Wall Street. India and Brasil are BRIC members, the implications of US tariff wars will affect other international buyers.
Maybe we need to quit worrying about what China is doing and quit wasting air saying their products are inferior. Maybe we need to actually start producing superior products again, we haven't been doing that much lately.
I buy the best product at the best price, regardless of origin.
Those of you laboring under the misconception that these Asian countries only produce junk are also free to buy overpriced junk from America.
10-20-2009 @ 2:01PM
amoozed said...
George,
Are you over 18 years of age mentally?
If so, your medications do not appear to be working.
10-20-2009 @ 8:25AM
bobby duncan said...
I am for free trade. if China buys 1dollar then we buy 1 dollar. If China only buys 50 cents then charge a 50% tariff. This is not rocket science.
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10-20-2009 @ 9:22AM
Dave said...
Obama only cares about running interference for the greedy unions in the US. He was bought and paid for during the presidential election process. The unions own Obama.------------------------------------------------------------
America is on the verge of destruction. "There is no insanity greater than electing a pathological narcissist as president." Pathological narcissists are dangerous because they look normal and even intelligent. It is this disguise that makes them treacherous.
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10-20-2009 @ 12:25PM
Mike McKibben said...
That's right Dave, blame this whole mess on President Obama and the unions. It just goes to show how little you really know about the real problems facing this country. The current problems facing this country got a big boost when the Free Trade Bill was passed, then big business greed and corruption kicked in (cutting of their noses to spite their face as it were). The dot.com mess and ENRON were just practice runs for what we face now with the Wall Street meltdown. As I recall it, Obama wasn't president when the bottom fell out, nor did the unions run Wall Street.
10-20-2009 @ 4:26PM
Sean said...
And "w" was what? He wasn't an intellectual. He wasn't a diplomat.
Complain all you want about Obama. At least he's at work everyday. He didn't spend his first 8 months on vacation or cutting brush in Crawford.
Hell, get the GOP out of the way, and we might actually get things done. They already made it clear they want him to fail. They hedged all their bets on the 2010 elections by saying "no" to everything.
10-20-2009 @ 9:57AM
AAAMERICAN said...
AMERICA DO NOT BUY ANUTHING MADE IN CHINA, TOXIC, FOOD DISEASED, UNFAIR TRADE, THE MONEY WE SPEND PAYS FOR WEAPONS THAT ARE GONNA KILL AMERICANS IN THE NEAR FUTURE. FACE IT THE NEXT WORLD WAR IS AGAINST CHINA. THEY ARE ARMING NORTH KOREA. WAKE UP STUPID AMERICANS. BUYING AT WALMART, KMART, DOLLAR STORES, AND MOST OF TECH IS FROM CHINA. BLAME WALL STREET FOR THE RISE IN OIL AND SCREWING WORKING CLASS AMERICA. OBAMA IS A LOST CAUSE. THERES A STRONG SENT OF REVOLUTION IN THE AIR.
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10-20-2009 @ 2:02PM
amoozed said...
It is normal, when people do not get what they want, to try to place the blame elsewhere.
Don't blame China because the US has been brain dead about economics. The best fix for America is renewed bright ideas and reasonably priced services. The problem is that we can't afford the junk made here.
10-20-2009 @ 10:08AM
jaalx6 said...
95% of what china exports is poorly made junk anyway. Maybe it's time the American people wake up and start buying American made products whenever possible and not only save some jobs but aquire a product that will last longer than the first time you use it before it breaks.
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10-20-2009 @ 12:04PM
Will said...
Actually, the quality of China made goods is mostly on par or better than American, dollar for dollar. China has now been capitalist for some time now so progress is rapid and they have access to all our manufacuring talent and technology (our businesses are moving there of course, even computer business). We simply do not have enough engineers or reward for innovation to bother with manufacturing in USA anymore. By the way, China (with our (capitalists) help and others are building a building over 5,000 feet tall, 3 tiems the world record, Ignorance is what is killing America. Oh and those Boeing orders? forget it
10-20-2009 @ 10:09AM
TEVA said...
China does not play fair when it comes to imports.
I am not a fan of free trade because the U.S.
has to many self imposed rules that do not apply
to other countrys so you need to impose the rules
with tariffs to compensate for things like minumin
wage and enviromental costs that other countrys
do not have.
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10-20-2009 @ 10:15AM
crksr said...
Let the tariffs war between US and China begin. The trade imbalance between the two countries leans heavily on our side so, reducing imports through tariffs will in the end favor our economy. The Chinese economy has been growing at a rapid pace thanks to America buying Chinese junk. Let's slow down the pace of the Chinese economy.
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10-20-2009 @ 4:53PM
enuff said...
Stop sending our food and medicine to China for processing by raising these tariffs. Then China can retaliate by raising tariffs their food imports; good luck with the Gobi crop yield.
Canada was doing a far better job selling our own medicine back to the American consumer at a lower price.
10-20-2009 @ 10:16AM
frank said...
So the union dolts are about to get what they "think" they want - protectionism. I can't wait to hear the squealing when prices start to sky-rocket at Walmart. Then the obligatory striking for higher wages & even more US business going under. But not to worry, Mr. Hope and Change is in charge. And I'll save all you liberal readers the trouble - we'll just blame Bush and the republicans. Unfortunately, that isn't going to put food on your plate. Until you libs. come to the understanding that it's business that keeps the US running, we'll continue on our downward economic spiral.
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10-20-2009 @ 12:56PM
fred said...
Everyone - take a deep breathe - we are all in this together. We all share in the blame (if that is what it is) for the USA losing jobs to overseas. Unions contributed by demanding wages and benefits that were out of line with reality, management contributed by shipping technology out as a response, but we the consumers are ultimately the most responsible because we have become so addicted to "Lowest Price" that we have stopped caring about where the products come from or who makes them, or that the quality has gone to the bottom. Everyone of us needs to demand products that are made in the USA and then be willing to pay the extra price. American workers will never be able to compete with the labor rates in China, India, and other countries where folks are ready, willing, and able to work at far lower salaries. You need to stop complaining unless you are willing to truly support "MADE IN AMERICA" by not buying the imported products.
10-20-2009 @ 10:18AM
dejaxon said...
I avoid buying chinese made products as much as possible. Some things I need and have no choice. But I have simply done without when I could only find a chinese made product. Buying American has become very frustrating. Even simple everyday items like Band-Aides. Not made in the U.S. and mostly made in China. In most cases I'll just hang on to my money rather than buy chinese.
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