Obama talks about the U.S.-China solar trade war and frequently wields the trade stick against China

Obama talks about the U.S.-China solar trade war and frequently wields the trade stick against China One day after the U.S. Department of Commerce initially ruled to impose punitive tariffs on solar panels imported from China, the United States...

One day after the U.S. Department of Commerce initially ruled to impose punitive tariffs on solar panels imported from China, U.S. President Obama "coincidentally" visited a Nevada solar company on the 21st and talked about the trade remedy case. The United States is strengthening trade enforcement to ensure that countries like China do not give their solar companies an unfair advantage.

"In fact, yesterday our administration ruled that China unfairly subsidizes its solar companies, so we took the first step to ensure a level playing field," Obama said.

The development of clean energy is an important policy promoted by the Obama administration. Recently, he has repeatedly stated: "I don't want to see wind turbines, solar panels and high-tech batteries coming from other countries and produced by workers from other countries. I want these products to be produced in the United States."

Currently, there are more than 5,600 solar energy companies in the United States, and the solar power produced by these companies is enough to power 730,000 American households. However, many of these companies are small enterprises and they are facing strong competition from their Chinese counterparts who are "cheap and good".

Many U.S. solar product manufacturers have previously accused their Chinese counterparts of receiving unfair government subsidies and selling their products in the United States at prices below cost. In response, the U.S. Department of Commerce made a preliminary ruling on the 20th and announced an additional tariff of 2.9% to 4.73% on Chinese-made solar panels.

On the day after the U.S. Department of Commerce made its ruling, Obama went to inspect solar energy companies. This move seemed to please the U.S. solar companies and their workers. In response, White House Press Secretary Carney only responded at the press conference that day that it was difficult to evaluate the effect of this ruling and the market reaction in just one day.

Recently, the Obama administration has frequently wielded the trade stick against China. On the 20th alone, it made affirmative rulings on four trade remedy cases against China. In addition to solar panels, it also involved chemical brighteners, galvanized steel wires, metallic silicon and other products exported to the United States from China.

Analysts believe that as the 2012 U.S. election is approaching, the Obama administration’s move is on the one hand in response to the Republican Party’s criticism that its China policy is too weak, and on the other hand, it is also to please some voters and win votes.

In this regard, the Chinese government has repeatedly criticized such protectionist measures and hopes that the United States will jointly maintain a free, open, and fair international trade environment and properly handle trade frictions in a more rational way.

The United States picks trade disputes six times in seven days. Politicians play the game of "hurting others and themselves"

In the US election year, the "election card" of trade protectionism was once again frequently played by all parties participating in the election. In just seven days, the United States has provoked six economic and trade incidents against Chinese exports. Politicians strive to create an image of defending public interests, but this kind of friction that harms others and does not benefit oneself can neither reduce the U.S. trade deficit nor fundamentally solve the problem of the outflow of American jobs.

In 2011, the U.S. trade deficit reached US$737.2 billion. As the world's largest exporter, China has become a "natural" target for many politicians.

"A new wave of accusations against China is emerging," Yale University professor Stephen Winch said. When talking about employment issues, the accusations are particularly strong, but people must note that the United States and 87 other countries also have trade deficits.

Chinese Minister of Commerce Chen Deming also estimated that China’s trade surplus with the United States only accounts for 1/4 to 1/5 of the entire U.S. trade deficit.

In Chen Deming's view, the US dollar, as a settlement and reserve currency, continues to accumulate overseas, which is one of the underlying reasons for the long-term trade deficit in the United States. Chen emphasized that under the premise that the United States has an overall imbalance in world trade, it is of little significance to just discuss the balance between China and the United States.

Who will solve the trade imbalance?

Therefore, regarding the issue of Sino-US trade imbalance, Chen Deming said that the answer should be given by the US Secretary of Commerce. He pointed out that Western politicians often criticize China for disregarding global balance, but they never mention that China is also the second largest importing country.

Since the outbreak of the financial crisis, China's total retail sales have been growing at an annual rate of 15%-18%. International Monetary Fund President Christine Lagarde once said frankly that if China had not provided the driving force, the global economic situation might have been even worse.

Under this situation, expanding exports to China has become a feasible path for the United States to reduce its trade deficit. However, as of now, the United States still has about 2,400 products that have not been opened to China. However, according to Gary Locke, the U.S. ambassador to China, he recently revealed that the United States will liberalize the export of 46 high-tech products to China. China has welcomed the U.S.’s intention to relax some export restrictions on high-tech products to China.

On the one hand, it accuses China of restricting rare earth exports, but on the other hand, it restricts the export of rare earth products to China on the grounds of safety. Chen Deming hopes that this ironic situation can be changed. He calls on the United States to allow Chinese companies to invest in the United States.

However, in an election year, how to win the support of voters by attacking the imaginary enemy of the issue is the top priority issue. The recent continuous increase in U.S. trade protection against China has also become a problem.

Who is hurt by the trade dispute?

The recent actions of the United States can be summarized as having two major goals: first, to use "double reverse" and other means to "restrict" the import of Chinese products such as crystalline silicon photovoltaic cells; second, to put pressure on China through multiple platforms to "not restrict" the export of rare earths.

Chen Deming once said that these actions by the United States are "very incomprehensible." He emphasized that trade protectionism is not only unfair to other countries, but also unfair to the country's citizens and companies, and will not have good results.

As far as Chinese export companies are concerned, in an environment where major external markets are cold, labor costs are rising, and the RMB is appreciating, the trade stick wielded by the United States will undoubtedly make things worse.

The United States is also unlikely to be the winner. The American Affordable Solar Energy Federation previously estimated that if the United States imposes 100% punitive tariffs on photovoltaic cells and modules from China, it will lose 50,000 jobs in the next three years.

Outside the economic field, the negative impact of the rise of trade protectionism may continue to spread. Obviously, economic and trade relations are the "ballast stone" that stabilizes the entire Sino-U.S. relationship. As China's Minister of Commerce said: "If you want to challenge it, it is beyond reproach to stumble on you."