U.S./China Trade War Expanding?

Keep an eye on this one, trade wars historically lead to either world-wide depression or a hot war...

Beijing's food seizure seen as retaliation
June 27 2007: China has impounded two shipments of food from the US on the grounds that the produce is unsafe and warned that procedures for monitoring American food imports should be tightened.

Government inspectors seized separate shipments of orange pulp and apricots from the US because they contained excessive bacteria and mould, China’s food safety inspectorate said on Tuesday on its website. Coming on the back of a series of scandals in the US over the quality of imported goods from China, the announcement will be considered by many importers as a form of retaliation by the Chinese authorities.

The statement comes one day after regulators in the US announced a recall of up to 450,000 tyres manufactured by a Chinese company because of a potentially dangerous safety problem. China’s General Administration of Quality Supervision, Inspection and Quarantine said it had impounded the orange pulp in the eastern province of Shandong and the apricots were seized in Shenzhen. The shipments contained “excessive bacteria, mould and sulphur dioxide”, the agency said, but gave no details about when they were impounded or how big the shipments were.

The agency’s statement said local departments had been advised to “strengthen quarantine and inspections on food imports from America”. An executive at a European trading company based in Shanghai said: “We cannot say anything for sure without seeing details about the shipments, but it certainly looks like a way of deflecting some of the attention away from China and its own quality problems.”

More FT.com / Asia-Pacific / China - Beijing’s food seizure seen as retaliation

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Feds Order At Least 4 Tire Brands Recalled
June 26, 2007 - Importer Says Radials Made In China Could Suffer Tread Separation

U.S. safety officials have ordered a New Jersey tire importer to recall as many as 450,000 tires that it bought from a Chinese manufacturer and sold to U.S. distributors. Foreign Tire Sales Inc., of Union, New Jersey, said an unknown number of the light truck radials it imported since 2002 from Hangzhou Zhongce Rubber Co., of Hangzhou, China, could suffer tread separation, a problem that led to the largest tire recall in the U.S. in 2000.

FTS said an unknown number of the tires it sold were made without a safety feature, called a gum strip, which helps bind the belts of a tire to each other, the company said in a filing to the National Highway Traffic Safety Administration. Some of the tires had a gum strip about half the 0.6 millimeter width that FTS expected, it said. Heather Hopkins, a spokeswoman for NHTSA, said its enforcement officials spoke to FTS on Monday to "let them know we want a full tire recall to take place."

"It is FTS' responsibility to do this," Hopkins said. FTS failed to add a "remedy" in its June 11 filing, which is essentially a description of how a company will notify customers and provide proper consumer compensation, Hopkins said. FTS attorney Lawrence N. Lavigne said the tires appear to meet federal standards but could still pose a risk to motorists. "FTS, at great expense, investigated this," Lavigne said. The company, which has about a half-dozen employees, does not have the money to pay for a recall, he said.

More Feds Order At Least 4 Tire Brands Recalled, Importer Says Radials Made In China Could Suffer Tread Separation - CBS News

Another trade skirmish...

U.S. To Stop Some Chinese Seafood Imports
June 28, 2007 - Shrimp And Catfish Are On List Of Farm-Raised Fish That Have Tested Positive For Unapproved Antibiotics

Farmed seafood joined tires, toothpaste and toy trains on the list of tainted and defective products from China that could be hazardous to a person's health. Federal health officials said Thursday that they were detaining three types of Chinese fish — catfish, basa and dace — as well as shrimp and eel after repeated testing has turned up contamination with drugs unapproved in the United States for use in farmed seafood. The officials said there was no immediate health risk and stopped short of ordering an outright ban.

Each year, the U.S. imports 150 million pounds of shrimp from China, a $300 million annual market, reports CBS News correspondent Bob Orr. Now Chinese "farm-raised" shrimp is off-limits and future imports will be blocked unless suppliers can show the seafood is clean. The Food and Drug Administration announcement was only the latest in an expanding series of problems with imported Chinese products that seemingly permeate U.S. society.

Beyond the fish, federal regulators have warned consumers in recent weeks about lead paint in toy trains, defective tires, and toothpaste made with diethylene glycol, a toxic ingredient more commonly found in antifreeze. All the products were imported from China. The New York Times reported today that approximately 900,000 tubes of tainted Chinese toothpaste has shown up in prisons, juvenile detention centers and hospitals in North and South Carolina, Georgia and Florida, including some serving the general population.

More U.S. To Stop Some Chinese Seafood Imports, Shrimp And Catfish Are On List Of Farm-Raised Fish That Have Tested Positive For Unapproved Antibiotics - CBS News

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Trade war looming?
Tainted Chinese goods could lead to trade war; American like cheap prices, but toy, food contamination raise fears
June 28, 2007

From tainted pet food to lead-painted toy trains, a string of recalled Chinese-made goods threatens to tarnish the Made in China label in the United States and intensify calls for trade protection. Americans love a bargain and it will take a lot for them to give up the Chinese-made toys, furniture, clothing, food, cosmetics, appliances and other goods that fill discount store shelves — and increasingly the upscale chains too.

But there are signs that China trade sentiment is souring: in Congress, on the editorial pages of U.S. newspapers, and even in a new advertisement criticizing retailer Wal-Mart Stores Inc. for its heavy reliance on Chinese imports. "Quality is one thing, safety is a different matter, and if we continue to hear this drumbeat of safety (problems), that could clearly impact consumers' perception of goods made in China," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

If the next case of tainted goods proves deadly, that may be all it takes to trigger a trade tussle. Trade relations with China already are fraught, with some on Capitol Hill arguing that China has an unfair advantage because its yuan currency is undervalued, making its exports more affordable here. They want the administration to take tougher action. The U.S. trade deficit with China hit a record $233 billion in 2006 and has continued to swell this year.

More Tainted Chinese goods could lead to trade war - International Business - MSNBC.com

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China still dragging its feet on the yuan effect...

US senators press China on yuan
FRIDAY, JULY 27, 2007 - China critics say the government undervalues the yuan by up to 40 per cent for unfair trade advantages, costing thousands of American manufacturing jobs.

A US senate finance committee has approved additional tools to increase pressure on China over alleged manipulation of its currency. The US treasury said it recognised congress wanted to send a strong message but said "direct, robust discussions with the senior Chinese leaders, not legislation" was the best way to achieve progress.

Thursday's decision comes before scheduled discussions in Beijing next week on the currency dispute and other economic issues, including product safety. The bill was introduced after the treasury department refused to cite China as a currency manipulator in a recent report to congress.

It is among several introduced this year aimed at China, even though the new measure does not mention the country by name, and will also allow the US to take similar measures against other alleged currency manipulators. Last year a bill in the senate proposed the imposition of an across-the-board tariff on Chinese imports.

'Fundamentally misaligned'

[waltky]

Trade gap widening...

US trade deficit widens sharply
Friday, 11 January 2008, Petroleum imports hit a record

The US trade deficit expanded to its highest level in 14 months in November as imports, especially of oil, overshadowed a rise in exports. The Commerce Department said that the trade deficit expanded by 9.3% to $63.1bn (£32bn) driven by a 16.3% jump in America's foreign oil bill. US exports rose by 0.4% to a new record of $142.3bn, getting a boost from the weaker dollar.

Analysts said the growing deficit could weigh on US economic growth. But they added that the trade deficit, the gap between imports and exports, should narrow in the longer term as the weaker dollar makes US exports more competitive on world markets. The trade gap widened by more than expected, with economist forecasting a deficit of $59bn compared with $57.8bn in October.

The US trade deficit with China shrank slightly to $24bn, down from a record high in October when shops were receiving shipments of toys in time for Christmas. However, the figures brought the year-to-date deficit with China to $237.5bn at the end of November, already eclipsing the annual record of $232.6bn set in 2006.

BBC NEWS | Business | US trade deficit widens sharply

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China's trade surplus jumps 48%
Friday, 11 January 2008, China has introduced measures to cool exports

China's trade surplus soared 48% in 2007 to a record high as its export-led economic boom continued, government figures have shown. The gap between what China exports and imports expanded to $262.2bn (£134bn) last year.

The latest big annual rise in the surplus may increase pressure on China to allow the yuan to rise in value. The US in particular accuses China of keeping the yuan undervalued to keep Chinese exports cheap.

China counters that it is moving towards allowing the yuan to trade more freely, but says it can only move slowly on the issue for fear of derailing its export-dominated economic growth. The West has also called for China to move faster on opening up its domestic market to foreign investment.

Safety scares