Indiana Grain Company, LLC

Posted: 09/14/09

By: tomgrisafi

An increasingly acrimonious trade dispute between China and the United States over the past three days is officially about tires, chickens and cars, but is really much broader.

Both governments face domestic pressure to take a tougher stand against the other on economic issues. But the trade frictions are increasing political tensions between the two nations even as they try to work together to revive the global economy and combat mutual security threats, like the nuclear ambitions of Iran and North Korea.

On Friday evening in Washington, President Barack Obama announced that the United States would levy tariffs of up to 35 percent on tires from China. China’s commerce ministry issued a formulaic criticism of the American action on Saturday, but after a frenzy of anti-American rhetoric on Chinese Web sites, the ministry unexpectedly announced on Sunday night that it would take the first steps toward imposing tariffs on American exports of automotive products and chicken meat.

Source: Reuters, CNBC

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