Breaking News, World News and Taiwan News.

Updated Tuesday, September 22, 2009 9:18 am TWN, The China Post news staff

Sponsors
▪	Get the best deals for Guangzhou Hotels or choose from more than 10,000 hotels in 499 Chinese cities.
▪	Find great real time deals on China Flights. Book flights to China or China domestic flights 24/7.
▪	Buy china wholesale products from reliable chinese wholesalers on DHgate.com!
▪	Save 75% for all hotels in Shanghai, Beijing and whole China. Lowest rates for Flights in China.

Obama's dire tire decision raises China's ire

On the other hand, the move could open a Pandora's box for other sectors of the manufacturing industry to follow suit — shoes, textiles, furniture, flowers, electronics, even garlic, to mention a few. They are indeed impacted by “surges” of low-cost Chinese imports. If Obama does not handle the issue wisely, it could lead to a trade war that nobody wants.

Understandably, President Obama's move was aimed at assuaging his political supporters. But the price was too high. His leadership and credibility suffered a severe drubbing.

It may be argued that enforcing America's trade law should not be faulted. But there are other considerations of greater importance — national economic interest and national political interest. America's economic recovery from the global recession needs China's help in buying more U.S. Treasury bills and debt. A large sliver of China's trade surplus with U.S., which totaled US$103 billion in the first half of this year, is invested in dollar-denominated U.S. debt and assets.

Besides, Obama's move also carries adverse political consequences. China's billion-strong netizens are angry and demanding their government to retaliate. Nationalistic feelings could be dangerous and damaging if left unchecked. In slapping the punitive tax, there should be proof of dumping or flagrant unfair trading practices as stipulated in the rules of the World Trade Organization. But the trade law invoked by Obama does not burden the United States with such proof. No wonder it has incurred the wrath of China.

In the past decade or so, Sino-U.S. relations have been growing stronger and more interdependent, despite some occasional spats. When Obama took office in January, he upgraded the regular, ministerial-level strategic economic dialogue with China to an even higher echelon. Obama knows that America needs an ally to tackle a host of thorny global issues — war on terror, climate change, nuclear non-proliferation in Iran and North Korea, the list goes on and on.

China, on its part, is the world's third largest economy and the largest exporter. Its near double-digit growth in the past three decades was largely fueled by exports to the U.S. While China needs the U.S., it is growing more assertive. It is hard for China to take the slap without a whimper. Obama will have a lot of work to do to smooth China's raised hackles.

1|2