US-China Trade War Begins!

In response to President Obama's decision to impose Section 421 tariffs on Chinese tires, the Chinese government took a short two days to retaliate. The Chinese Ministry of Commerce announced that it will initiate the necessary proceedings to address anti-dumping and countervailing duties on U.S. imports of chicken products and automobile parts.

Commentators have feared and forewarned such reactions from China if President Obama were to utilize the obscure trade protection remedies that the U.S. negotiated with China before its entry to the WTO. Nobody is surprised by this quick retaliation from China. However, how much more will China do in response to Obama's ostensibly pro-union trade policy is anyone's guess.

The following analyses on the Section 421 case are extraordinarily insightful:

http://lincicome.blogspot.com/2009/09/in-announcing-tire-tariffs-obama.html

http://lincicome.blogspot.com/2009/09/421-afterthoughts-trade-war-edition.html

http://www.cato-at-liberty.org/2009/09/12/obama-to-impose-tariff-on-chinese-tires/