Tariffs on Chinese tires are a bad idea

ARTICLE: U.S. to Impose Tariff on Tires From China, By Peter Whoriskey and Anne Kornblut, Washington Post, September 12, 2009

OPINION ASIA: A Protectionist Wave, Wall Street Journal, SEPTEMBER 13, 2009

ARTICLE: China Moves to Retaliate Against U.S. Tire Tariff, By KEITH BRADSHER, New York Times, September 13, 2009

Already decried as a "protectionist wave" by the WSJ. The fear: Obama is invoking a seldom used (and vetoed four times by Bush) Section 421 trade law that allows U.S. industries or unions to seek protection from surges of Chinese imports.

When Obama bends on this, more pressure for protectionism will follow, and low-income consumers in the U.S. will suffer. Job losses will merely be postponed.

Predictably, China is already retaliating.

(Thanks: David Brooks)

Comments

[kp]

How do you put tariffs on China at the same time ask them to finance our deficit?

[large]

You'll have to ask the Administration for the real answer, but it either requires more balls than a 48 lane bowling alley, or plain stupidity . . in my opinion . .

[joe Michels]

One of Obama's campaign pitches was the Republicans had nothing but old tired ideas and the what America needed was change from those old ideas. Hmm... tariffs are now new ideas I guess.

The simple fact is that Obama's domestic agenda is nothing but rehashed and failed ideas from the recent past. Obama was correct when he said Republicans had old ideas such as free trade and open markets. Those ideas are as old as civilization itself and made this country successful. In doing so it propelled our culture as the model for the rest of the world.

My hope that Obama is smart enough to stop what he has started and that his constituents accept the bone that he has tossed to them and move on without demanding more tariffs.

[stuart abrams]

This is being blown out of proportion. The imposition of tariffs is consistent with the findings of the International Trade Commission, a bi-partisan independent agency, which found violations of anti-dumping rules and had recommended tariffs substantially higher than those Obama imposed. China can appeal this to the WTO, and apparently is doing so. To be sure, Obama was undoubtedly sensitive to political concerns, but that doesn't mean the action was unjustified. Free trade does not mean unregulated trade; it means trade consistent with trade agreements. Whether or not there is any violation here will be sorted out by the WTO, which is what is happening. Calling this a "wave of protectionism" and raising the specter of Smoot-Hawley is way off the mark, and a bit irresponsible.

http://blogs.wsj.com/financial-adviser/2009/09/15/toning-down-the-talk-of-china-trade-war/

Re US debt: China (along with millions of other investors, foreign and domestic) does not buy US debt instruments as a favor to us, it does so because it makes economic sense. US debt pays market rates of interest and the US government is world's most solvent and reliable debtor. If China could find a better investment, I'm sure it would do so. China is not about to cut off its nose to spite its face by refusing to buy US debt merely because of a trade dispute that is properly being resolved in the WTO.