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December 14, 2011  –  New Canaan, CT

We just read this headline on the news wire and could not help but post a comment, as this news affects every resident of the United States including everyone residing in Connecticut.  We need to create US based jobs in a fair and level global economic playing field….

China to impose duties on cars imported from U.S.
December 14, 2011 – 6:30 am ET
BEIJING (Reuters) — China said today it would impose anti-subsidy and anti-dumping duties on imported cars made in the United States, the latest in a series of trade spats between the world’s two largest economies.

The duties, to affect the Detroit 3 and some U.S. units of foreign automakers, will begin tomorrow and last two years, the Commerce Ministry said on its Web site. Cars that have engine capacity at or above 2.5 liters will be hit with duties ranging from 2 percent to 21.5 percent.

General Motors Co. will face anti-dumping and countervailing duties ranging from 8.9 percent to 12.9 percent. Chrysler Group’s will range from 6.2 percent to 8.8 percent, while the U.S. units of BMW AG and Mercedes-Benz will face duties of 2 percent and 2.7 percent, respectively.

The ministry’s statement said U.S.-made cars and SUVs benefited from subsidies and had been dumped into the China market, causing “substantial damage to China’s domestic industry”.

U.S.-China trade tensions have been mounting in recent months, particularly in the solar industry, where tit-for-tat trade probes have underscored leaders’ warnings of a rising tide of protectionism amid gloomy global economic forecasts.

Ten years after China joined the World Trade Organization, experts say it is likely to become more deeply enmeshed in trade disputes.

More problems for Beijing at the trade governing body will be partly due to its ever-expanding trade footprint, but also because many of its trading partners have growing concerns over what they see as state support for strategic industries.

The United States has filed 12 trade cases against China since it joined the WTO, five since U.S. President Barack Obama took office.

China’s Commerce Minister Chen Deming said in late November the country is likely to fight back if other countries resort to trade protectionism.

Bloomberg contributed to this report.

The Chinese assertion that US built vehicles are being “dumped into the China market, causing “substantial damage to China’s domestic industry” is a pretty BOLD claim. The word ‘dumped’ and causing ‘substantial damage’ would indicate that US Built vehicles are priced SIGNIFICANTLY LESS THAN Chinese built autos, thus hurting their domestic industry.

In reality, US built autos sell at a significant premium to Chinese built vehicles and Chinese consumers are buying them because they offer significantly better quality than Chinese built vehicles and they are a status symbol.

This is a remarkable response from a country that has thrived on shipping cheap goods to markets like the US and undercutting anything produced locally in those countries. A true global economy only works if there is a relatively level playing field – and clearly the Chinese are not ready to play by fair international rules.

The Chinese economy has become force and unless governments put outside pressure on them to operate their domestic economy more openly, the problem will only get worse. It seems like the time is right to absorb some short-term pain by taking steps to either cut-off Chinese imports or add a duty on Chinese made goods in order to achieve some long-term gain in US-China business relations.

With our domestic economy struggling to create jobs and gain some positive momentum, we view this move by China as a direct slap in the face of the very US consumers who have been buying up Chinese made goods here in the US for years.  These are the same consumers who must first earn a living here in the US to have any money to spend.  The Chinese economy has benefited from years of open US boarders where we accept their goods and allow them to be sold at prices that have frequently undercut goods made here.

Yet when the first inkling of US made goods begin to be exported INTO China, their government chooses to act up.  It is time for the US Government and other Governments around the world to stand up to the emerging bully behavior coming from China.

Here at KARL Chevrolet, we are proud to have represented Chevy products since 1927.  We believe in America and we hope you do as well.

What do you think?

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