Skip to comments.A Protectionist Wave--Obama invites a rush of similar claims with his tariffs on Chinese tires
Posted on 09/12/2009 10:27:14 AM PDT by jazusamo
The White House leaked word late Friday evening that the U.S. will impose a 35% tariff on imported Chinese tires used by millions of low-income Americans. We wonder if President Obama understands the political forces he's unleashing with this blatant protectionism.
Mr. Obama is setting a precedent in the tire case because he is applying a previously unused part of the trade law known as Section 421. This allows U.S. industries or unions to seek protection from "surges" of Chinese imports, with a lower burden of proof than normal antidumping or countervailing duty cases. President Bush nixed the four Section 421 petitions that reached his desk, citing the national economic interest. Domestic lobbies had lobbied Mr. Obama hard to reverse that pattern and set a new protectionist precedent.
Eleven Senators, including Sherrod Brown (D., Ohio) and Debbie Stabenow (D., Mich.), sent a letter to President Obama in July advocating the tariff on Chinese tires. "We firmly believe that providing this specific measure of relief would send a powerful message to the American people that you intend to keep your promise to enforce trade laws fully," they wrote.
Then there are companies that face competition from lower-cost Chinese imports and want to push their antitrade agenda forward. Take the Committee to Support U.S. Trade Laws, which lobbed a pro-tariff letter into the White House this month. The umbrella group includes the American Furniture Manufacturers Committee for Legal Trade; the California Fresh Garlic Producers Association; the U.S. Beekeepers; the Florida Fruit & Vegetable Association; and the Flower Growers of Puget Sound. "This case is being watched closely to see whether Section 421 is an effective law or a dead issue,"committee executive director David A. Hartquist wrote to Mr. Obama.
(Excerpt) Read more at online.wsj.com ...
Good move. Level the playing field. Put the same costs on foreign manufacturers that are mandated for America manufacturers. If American companies have to pay extra environmental, health care, taxes and regulatory costs then put the same dollar load on foreign companies. Its like States do on equalize sales taxes with compensating use taxes.
I appreciate the concerns many have with jobs being outsourced and all, but this is nothing more than capitulation to the unions, and sets a dangerous precedent. We’ve got to be competitive in a global economy, and protectionism isn’t going to work in the long run.
Personally I see no problem with tariffs. This is how the federal government was originally funded. Now if only income taxes could be rolled back more.
Errrr.. No.. Wrong move.
Correct move would of been to strip the regulations, taxes, and enviromental mandates off of American companies.
I couldn’t agree more, protectionism is a bad path to take.
Frankly, they should ban Chinese imports and exports.
I have a better idea:
Why not CUT TAXES AND REGULATION on U.S. Manufacturers?
I think he has basically pronounced the policies of FDR as 'sane', leading to this kind of economic collapse:
GOVERN CON MENT SUMP INVEST PUR EXPO IMPO NET YEAR GDP TION MENT CHASES RTS RTS EXPORTS ---- ----- ----- ---- ----- ---- ---- ----- 1929 790.9 593.9 92.4 105.4 35.6 46.3 -10.7 1930 719.7 562.1 59.8 116.2 29.4 40.3 -10.9 1931 674.0 544.9 37.6 121.2 24.4 35.2 -10.8 1932 584.3 496.1 9.9 117.1 19.1 29.2 -10.1 1933 577.3 484.8 16.4 112.8 19.2 30.4 -11.2 1934 641.1 519.0 31.5 127.3 21.4 31.1 -9.7 1935 698.4 550.9 58.0 131.3 22.6 40.7 -18.1 1936 790.0 606.9 75.5 152.5 23.7 40.2 -16.5 1937 831.5 629.7 94.0 147.0 29.9 45.3 -15.4 1938 801.2 619.5 61.3 157.8 29.6 35.2 -5.6 1939 866.5 654.0 79.5 171.8 31.2 36.9 -5.7 1940 941.2 688.0 111.3 174.2 35.4 37.8 -2.4 1941 1101.8 737.1 137.3 288.0 36.4 46.5 -10.1 1942 1308.9 719.7 72.1 692.0 23.9 42.2 -18.3
Wrong, it wasn't a good move. A good move would have been to lower taxes on corporations, including evironmental etc. Level the playing field that way. This is going to cause no end of trouble.
I believe there’s something to be said for that. The Chinese want our trade but they build a military machine to defeat us and the free world.
Protectionism turned a mild recession into THE GREAT DEPRESSION!
If you believe in liberty, you should believe that I have the right to purchase whatever I want, from whom ever I want, at a price we both agree upon.
End of story.
There is a lot of buzz on the net about a lot of these tires being dangerous and short lived. The Chinese don’t give a crap about quality control, safety etc. Anything to make a buck and you never know when they will subsitute materials or change specs without purchasers knowing.
It would have been more clever just o ban them for safety reasons and hold them up for years due to that.
And, China bans the “import” of US Bonds?
This type of protectionism will lead to higher prices and inflation, at a time when American families need it the least. We are currently at 16% unemployment, and deflation, not inflation is what is needed.
We have enough causes of inflation. The stimulus bill and additional government debt causes inflation, and to combat this, the Federal Reserve will raise interest rates. Raising interest rates will ensure that the real estate market will never recover.
There is a lot of buzz on the net about a lot of these tires being dangerous and short lived.That can be addressed in the market place, and by requiring that tests be performed, by requiring conformance to safety standards.
To simply assess a 'tariff' IMO is, well, dumb.
It will level nothing. All this will do is cause 1930 all over again. If people in this country that 'buy American" policies will put American's to work, they have no idea on how many of the jobs we still have in this country depend completely on free trade.
So enjoy your "buy American" closed border communist country. You are getting what you ask for after all. Including the 50% or more unemployment that goes with it as other countries start slapping tariffs on American products.
Why people have this "everyone works in a factory" mentality is simply amazing.
Most successful American manufacturing in this country is automated and produces a product far superior and cheaper than anything hordes of cheap labor could ever come close to producing. But what does the average protectionist think? Cheap labor= cheap products. Nothing can be further from the truth.
However Marxists, leftists, Democrats, and narcissists hate being bugged with history and economics.
Question: how will they blame a trade war on Dubya?
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