Blog 4: Chinese Tire Tariff and American Chicken Feet

In 2009, the Obama Administration implemented a steep tariff on imports of Chinese-made tires. The tire tariff was structured with a 35 percent duty the first year, 30 percent the second and 25 percent the third. This is in addition to the 4% base tariff. The intent of this regulation was to protect American jobs and save the tire manufacturing industry in the US. According to Market Watch “U.S. imports of Chinese tires rose from 14.6 million in 2004 to 46 million in 2008. Accounting for about one-sixth of the U.S. market. Four U.S. tire plants have closed in the past two years (2007-2008) and more than 5,000 workers have lost their jobs. But China wouldn't be the only one affected by the tariff. It would also impact U.S. companies, such as Goodyear Tire & Rubber Co. (GT, Fortune 500) and Cooper Tire & Rubber Co., (CTB) which are both based in Ohio but have factories in China.  ” As a whole, tariff is a double-edged sword for countries, which have only few limited resources and deeply depend on import trade and export trade.

While tire imports from China have declined since 2009, tire imports from several other countries are up. This confirms that if “it doesn’t get built in China and it’s too expensive to make in the U.S., it will get made in a cheap locale somewhere else.”

Chicken feet are a caused tension between China and United States. China is the largest consumer of chicken feet and it imports chicken feet from US. Chinese consumers prefer the taste of meat on the bone. Chicken feet   is very crucial part of the trade relationship between the US and China for which U.S has advantage over exports to China. China is an important market for American poultry, particularly for portions like chicken feet, which are a delicacy in China but barely marketable in the United States China increased tariffs on the imports of chicken feet from U.S, because it affects the domestic market of China. China imposed tariff between 50% to as high as 105% on the U.S imports of chicken feet. American farmers and the Obama administration are likely to be particularly disappointed by the new poultry tariffs because China’s increasing affluence has resulted in a surging appetite for protein, one that American chicken farms hoped to satisfy. “China is viewed as a potentially hugely growing market for poultry,”

In these two cases named, Chinese tire tariff and American chicken feet are the great example to explain how important role the tariff is and how it can benefit or damage a country’s economy.

In my opinion, the developed countries such as U.S and China should balance pros and cons of tariffs so that they could protect domestic manufacturers and consumers in their country.