Officials disagree on tariff to China

AIKEN - Concerns about fair trade with China have led to concerns about the communist country's rapidly growing military.

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Sens. Jim DeMint (top) and Lindsey Graham have opposing views on a 27.5 percent tariff on Chinese imports. Special

And views expressed by South Carolina's U.S. senators personify opposing ideologies on how to handle the subject.

"It's becoming crystal clear to the Senate that China's trade abuses and military growth is a threat," U.S. Sen. Lindsey Graham, R-S.C., said last week in a telephone interview.

"(We're) allowing a communist dictatorship, which is inherently an enemy to democracy, to grow at our expense," he said. "I'm of the opinion that we've negotiated too long. It's now time to be bolder."

Mr. Graham co-sponsored a bill that calls for a 27.5 percent tariff on Chinese imports if the country doesn't revalue its currency, which people on both sides of the free-trade issue agree has been kept low and provides an unfair edge.

The U.S. trade deficit with China hit $162 billion last year, and Chinese imports were given a boost in January, when quotas on some products were lifted.

Meanwhile, U.S. Sen. Jim DeMint, who voted to table a vote on the proposed tariff plans, prefers a wait-and-see approach. He agrees that the Chinese yuan is deflated but is optimistic that the matter can be negotiated.

As China's economy grows, he said, so will its peoples' political freedoms.

"We can't fix the problem by putting up tariffs and raising the cost of goods for the American consumer," Mr. DeMint said.

"There's an old saying, 'When products and people cross borders, armies don't have to,'" he added.

A study by the Center for Economic and Policy Research shows that China's economy will surpass the U.S. economy by 2016. At that rate, if China spent as much on its military as the United States does now, it would be outspending the United States by $720 billion in 2050, the study shows.

Organizations such as the American Manufacturing Trade Action Coalition, which represent hard-hit sectors such as the textile industry and support trade tariffs with China, have seized upon such projections.

"It's an argument that gets overwhelmed by this whole consumerism issue," coalition Executive Director Auggie Tantillo said.

Critics of Chinese trade policies highlight that the United States didn't use trade to disarm the former Soviet Union.

"I'm just thankful back in the '80s that nobody thought to call the Soviet Union a big, emerging market," said William Hawkins, a senior fellow for national security studies at the U.S. Business and Industry Council.

"We run trade deficits with virtually everybody," Mr. Hawkins said. "The fundamental difference is Japan is not using the gains to build weapons aimed at us. China is."

Proponents of free trade argue that cheap production costs in China provide less expensive goods on U.S. shelves.

Manufacturers exaggerate the number of jobs they've lost because of China, and many textile jobs once performed by hand are no longer needed, said Julie Hughes, the vice president of the U.S. Trade Association of Importers of Textiles and Apparel.

The textile industry wants special protections from the government and highlights the connection between China's growing economy and its growing military to scare Congress into providing them, she said.

"Think back to when Nixon first traveled to China," Ms. Hughes said. "No one could argue that China isn't a much more open and a much more free country than it was in the 1970s.

"Today, there are satellite dishes hanging from the balconies of the apartment buildings in Beijing."

A final vote on the proposed tariff will come no later than July 27. If it passes, a 180-day negotiation period will ensue, followed by a temporary 27.5 percent tariff on all Chinese goods if negotiations fail.

The tariff would only drive up prices for the consumer, said Dan Ikenson, an analyst with the Cato Center for Trade Policy Studies.

"Wal-Mart shoppers would basically be paying a 27.5 percent trade tax," he said.

Reach Josh Gelinas at (803) 648-1395, ext. 113, or josh.gelinas@augustachronicle.com.

--From the Sunday, April 17, 2005 printed edition of the Augusta Chronicle