Anti-Dumping and Anti-Trust: US-China Struggle Continues

The United States and the Chinese Communist Party (CCP), both mighty powers on opposite sides of the Pacific Ocean, share an intricate relationship – from their early mutual hostility, the Cold War and containment to sports exchange, diplomacy and even strategic partnership. In the past 70 years, these two countries have seemed to gradually get along, but behind the scenes they have been eyeing each other’s moves, faking smiles and denying everything. In fact, the U.S., as the “world’s policeman” — famous for maintaining global peace and ready to send soldiers to aid other countries — is actually merely thinking about its own economic interests and hegemony. The CCP, on the other hand, has supported the Nonaligned Movement for a long time, assisting backward Asian and African countries, and it does not frequently interfere in other countries’ internal affairs like the U.S., thereby gaining more support from Asian and African countries.

After the Soviet Union collapsed on Dec. 12, 1991, America’s global hegemony was fortified, but China’s rapid rise was the thorn in its side. Thanks to China’s close relationship with the Association of Southeast Asian Nations (ASEAN), it established the ASEAN Plus One (later adding Japan and South Korea and becoming the ASEAN Plus Three). Recently, the ASEAN and CCP expanded to establish the Regional Comprehensive Economic Partnership (RCEP). As of now, there are 16 countries negotiating to join the CCP’s new organization.

Meanwhile, the U.S. does not dare show its weakness. In 2006, the U.S. created the Trans-Pacific Partnership (TPP), consisting of countries like Singapore, Brunei, Chile and New Zealand, turning the cold treatment it had suffered into positive promotion of its leadership, and quickly expanding from negotiating with the original P-4 countries to 12 countries. This rivalry between China and the U.S. is but a preview of the years to come.

To hinder the CCP, the U.S. has expressed support for Japan’s sovereignty of the Senkaku Islands, and has also engaged in military cooperation with the Philippines and Vietnam. The U.S. seeks to restrict the CCP in the Xisha and Nansha Islands and adjacent waters, and has expressed support for Vietnam in the South Sea oil platform dispute. The U.S. also continues to cooperate with South Korea in its defense against North Korea, behind whom the CCP takes cover.

In other words, through organizing international economic organizations and defense cooperation with individual countries, the U.S. is strengthening its containment of communist China. The purpose of this containment, besides maintaining its world hegemony, is to consolidate its global economic interests. In terms of economic interests, the CCP is no longer merely a dependent world factory, but has gradually become a sturdy world market for the U.S. and Western Europe. In its effort to confront the CCP as both a world factory and world market, the U.S. takes every kind of measure to suppress its operations.

For a long time, the U.S. has repeatedly advocated globalization and liberalization. Besides using economic theory to prove that globalization and liberalization can enhance the economic well-being of people around the world, the U.S. itself benefits the most from both. America’s long-term trade deficit seems to have paid a heavy price for free trade, but in fact, the U.S. can now use its currency to obtain trade and services from around the world. However, in addition to printing money in exchange for physical resources, the U.S. pays attention to the impact of international trade on its own industry and employment. There are three separate ways it does so: Regarding foreign currency exchange rates, it frequently checks for governments of trade rivals to use unfair strategies to manipulate exchange rates; in terms of product prices, it monitors whether its local industries are affected by other countries’ unfair dumping practices; and in regard to the price structure of imported products, it watches for governments of other countries using any form of subsidies.

The U.S. government often accuses China of engaging in exchange rate manipulation, dumping and subsidies in its exports to the U.S.. As for the exchange rate issue, the U.S. often negotiates through the government, using its strong international political and economic dominance. As for the accusation of dumping and subsidies, the U.S. also imposes very high anti-dumping and anti-subsidy duties (i.e., double-anti duties). A few months ago, there were predictions that America’s high tax rate on Chinese exports could help Taiwanese solar power dealers profit dramatically from late last year to early this year.

However, on July 26, as soon as the U.S. Department of Commerce noticed low-price dumping of Taiwanese and Chinese solar panels and batteries, it imposed an average tax rate of 35.89 percent on Taiwanese dealers. This is lower than the 47 percent rate given to Chinese dealers, but it is still not quite what Taiwanese manufacturers expected.

In fact, the U.S. government makes scapegoats out of Taiwanese manufacturers, using the Chinese government’s toughness. When the U.S. put an anti-dumping tax on Chinese solar products, it also included Taiwanese manufacturers, showing that it has no presumptions or prejudice regarding China. Taiwanese manufacturers were simply guests at the feast at Hangmen; they no longer wish to partake in the final judgment of anti-dumping duties and hope that their final anti-dumping duty will be much lower than that of mainland manufacturers.

Because the U.S. is frequently ready to do double-anti duty inspections of Chinese exports and even impose heavy taxes, communist China has also promoted anti-monopoly practices since as early as Aug. 1, 2008, and has conducted anti-trust investigations of well-known companies in both Europe and the U.S., such as Qualcomm, Microsoft, Mercedes, Audi and BMW. In the automotive industry, it is rumored that Toyota, Honda and Nissan were also caught in the crossfire. According to Chinese anti-monopoly law, manufacturers who abuse their market positions will be ordered by anti-monopoly law enforcement agencies to stop, have their illegal earnings confiscated and receive an annual sales penalty between 1 and 10 percent, which is meant to keep manufacturers on their toes.

In fact, this anti-dumping and anti-monopoly wave is the sequel to the international political and economic struggle between the United States and China; however, while they try to act like big countries and not point fingers, they still end up hurting innocent passersby.