China just slapped a huge 22% tariff on some U.S. auto imports. Reuters:
China will impose punitive duties of up to 22 percent on large cars and SUVs exported from the United States, China's Commerce Ministry said on Wednesday, the latest in a series of trade disputes between the world's two largest economies.
Why? Because China wants to develop it's own domestic luxury SUV industry. China already imposes an outrageous 25% tariff on U.S. truck imports. This makes the total tariffs on SUVs 47%!
What this really means is GM and other SUV U.S. manufacturers will move production offshore....to China. In other words, to sell SUVs, trucks in China, this outrageous tariff will force U.S. manufacturers to offshore outsource even more jobs simply to continue selling their products in that country and gain access to China's markets.
China's claim the U.S. is dumping SUVs in China is absolutely pure fiction. As it is, a 25% tariff on trucks is obscene considering China is killing this country with imports and the second largest economy in the world.
The House Ways and Means Committee is finally growing a spine and issued a joint statement from both Republican and Democratic Committee leadership:
We are extremely concerned by China’s announcement today that it will impose new duties on U.S. auto exports. China’s actions are unjustifiable, and unfortunately, this appears to be just one more instance of impermissible Chinese retaliation against the United States and other trading partners. This action appears to violate China’s WTO commitments, and we urge the Administration to exercise all available options to enforce U.S. rights, including, as appropriate, enforcing U.S. rights at the World Trade Organization.
Remember that Chinese Currency Manipulation Bill? How it passed the Senate with flying colors, has the majority of House representatives as legislation co-sponsors, yet Speaker John Boehner won't let the bill come to a floor vote? Isn't it about time John Boehner allowed the House of Representatives to vote on the bill so it can finally pass and become law?
China's currency is estimated to be 24-40% below value of what it should be and gives China an across the board, unfair trade advantage. Now tack on a 47% SUV tariff. You get the picture and pickle GM, Ford and other U.S. manufacturers are actually in.
Don't let China get away with more heads I win, tails you lose economic strategy plays.