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Punitive tariffs won't solve U.S.-China trade disputes

(Xinhua)

08:21, October 20, 2012

BEIJING, Oct. 19 (Xinhua) -- The United States should seek candid dialogue and fair negotiations, rather than imposing punitive tariffs, to settle trade frictions with China amid a weak global economy.

It is a plain truth, but Washington apparently opted to ignore it once again.

On Thursday, the U.S. government launched anti-dumping duty (AD) and countervailing duty (CVD) investigations into hardwood and decorative plywood imported from China, on the grounds that the products were "sold at less than fair value in U.S. market."

Indeed, it was not the first time this month that Washington took a hardline against Beijing regarding bilateral trade disputes, especially when the Nov. 6 presidential election is just around the corner and both presidential candidates were using China as a punching bag.

Since the start of the election year, the Obama administration has launched four AD and three CVD investigations into imports of Chinese products, including stainless steel sinks, xanthan gum and wind towers.

Evidently, the latest surge of U.S. trade protectionism against China has much to do with the election politics, and it is also closely linked to the country's sluggish economic recovery.

However, the U.S. government should avoid rushing to punitive tariffs on Chinese products, as such actions would undoubtedly hurt increasingly closer U.S.-China trade relations, which are crucial to the global economic recovery, and lead to a trade war that would benefit neither side.

Moreover, the recent protectionist moves by the U.S. government would not only harm Chinese exports, but also victimize the U.S. economy as U.S. companies would have to burden higher costs in a slack economy.

Undoubtedly, with rapid expansion of U.S.-China trade, frictions are inevitable. But seeking a solution by resorting to trade protectionism and slapping tariffs would bring nothing but a Pyrrhic victory, which will finally undermine the win-win cooperation between the world's two largest economies.

Therefore, both the United States and China should work together with a rational attitude to settle trade conflicts through candid dialogue and fair negotiations, uphold the principle of free trade and prevent the disputes from further escalating into retaliatory trade wars.

As U.S. International Trade Commission is scheduled to make its preliminary injury determination on the case on or before Nov. 13, 2012, Washington should bear in mind that for its own good, it should honor its commitment of free trade and make a rational decision.

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