Here be dragons

12 April 2007 By Martin Hutchinson

The US seems determined to bash China on trade. That may play well in the US right now, but it is selfdefeating. US/China trade helps keep US inflation low, so endangering trade imperils the US economy.

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The US lodged two cases with the World Trade organisation against China on April 9. One demanded that China impose jail sentences on copyright pirates, rather than simply fining them. The other sought to open the Chinese market for audiovisual goods.

On March 30 the US imposed antidumping duties ranging from 10.9% to 20.4% on $224m exports of coated paper from China to the US.

On April 10, China said the WTO action was against the consensus reached between the two countries' leaders on developing bilateral trade relations and properly handling trade problems. China also expressed great regret and strong dissatisfaction at the action.

The United States bilateral trade deficit with China in 2006 was $230bn, with $66bn of US exports of goods and services to China balanced against $296bn of imports from China.

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