On Friday, U.S. Commerce Secretary Carlos Gutierrez announced tariffs on two Chinese manufacturers of glossy paper, at 10.9% and 20.4%, respectively (based on the total amount of their illegal subsidies), effective immediately. His counterpart in China responded over the weekend, saying, "China strongly demands the U.S. to reconsider this decision and correct it as soon as possible." China had been exempt from such tariffs over the past 20 years, but now there's concern tariffs could be extended to other industries such as steel and textile. The chief currency strategist at TD Securities in Toronto commented, "The whiff of protectionism killed off the bullish sentiment on the dollar," which fell against both the euro and yen. The dollar also faces pressure due to the situation in Iran. The possibility of trade tensions escalating with China has some analysts worried, since it is the second largest investor in U.S. treasuries. Bloomberg mentions U.S. government data shows China's exports of glossy paper doubled in 2006 to $224 million.
