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Trade Tensions Flare Between U.S., China as G-20 Nears

New U.S. tariffs on Chinese tire imports have created a feud between the two nations ahead of next week's meeting of the Group of 20 industrial and developing nations. Trade experts speak with Jeffrey Brown about how the dispute will affect future U.S.-China trade.

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  • GWEN IFILL:

    And still to come on the NewsHour tonight: wavering support for the Afghan war; charges of war crimes in the Gaza conflict; and Tanzania's doctor shortage. That follows the trade tug-of-war between the U.S. and China. It's over tire imports.

    Jeffrey Brown has the story.

  • JEFFREY BROWN:

    The president's appearance before big labor today came just days after a set of trade sanctions announced by his administration that brought praise from unions and reproach from free trade advocates.

    Late Friday, the U.S. said it would impose a 35 percent tariff on Chinese-made tires. That followed a complaint by the steelworkers union, contending that Chinese imports are flooding the market and have led to the loss of some 5,000 American jobs.

    Yesterday, the Chinese government warned it might retaliate against American auto and poultry exports and said it would bring its own complaint to the World Trade Organization.

    We explore this trade tiff and its potential consequences now with Congressman Sander Levin of Michigan, a Democrat who chairs a key trade subcommittee, and Daniel Price. He was an assistant to President Bush for international economic advisers and he's now a partner at the law firm of Sidley Austin.

    Congressman Levin, I'll start with you. Fill in the picture as you see it. What's the case for sanctions here?

  • REP. SANDER LEVIN, D-Mich.:

    This isn't a case of free trade versus unions. This is a matter of trade policy, sound trade policy. When China entered the WTO, we worked on this. They agreed specifically to section 421. If there was a surge of products, we could take action. And there was here. And the International Trade Commission, the ITC, found that.

    In just four years, tire imports here surged from 15 million to over 45 million. Prices were undercut by that. There was a 30 percent displacement in terms of American production, and about 5,000 American jobs were lost.

    So this was a matter of sound trade policy. The president has said during the campaign that he was going to enforce trade agreements reached by the Congress, take each of these cases one by one. He took this case, and he abided by the ITC recommendation, unlike the Bush administration. Four times the ITC recommended action; four times the Bush administration said no.

    Sound trade policy means expanded trade and rules of competition, and that's what is exactly at stake here.

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