Glossy paper war

For the first time, the U.S. has decided to impose countervailing duties on two Chinese companies exporting glossy paper to the U.S. following a complaint by an American company. Normally, countervailing duties are not imposed on a country with a non-market economy. The U.S. and the E.U. still do not consider China to have a market-economy. But in that case, according to their own rules, no countervailing duties should be imposed.

In order to justify the measure, the U.S. Commerce Department now says that China has changed a lot and now in fact is a market economy. But it provides no proof that the Chinese companies received subsidies. On the other hand, some American companies are certainly receiving subsidies. Just look at the billion dollar contracts Halliburton has received in Iraq with nothing to show for.

The imposition of duties on glossy paper imports paves the way for duties on other Chinese commodities and a possible trade war. The WTO could rule on the matter, but that will take a couple of years. In the meantime, a lot of damage will have been done.

Some anti-China elements in the U.S. will do anything to harm trade with China, not to protect American industry, but for political motives. They are already thinking of a future war with China and want to sabotage the Chinese economy. They are playing a dangerous game. China can also hurt the U.S. economy if it wants to.