Question

Questions:

1. Why is the Chinese government so upset about a new tax on such an insignificant product as
automobile tyres?

Answer 1

Answer: It would reduce Chinese exports

Step-by-step explanation:

This is in relation to the 35% tax that the Obama administration slapped on Chinese tires.

China is able to produce tires at a cheaper rate then the United States so when they export these tires to the U.S., they sell for a cheaper rate which makes people buy them more.

With an increase in the taxes on them, the tires would become more expensive for U.S. consumers so they will buy less Chinese tires. This will lead to the Chinese companies that make tires selling less and having to reduce production which would lead to them having to fire people.