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?
Works for me.
They are far, far, far more dangerous than the islamic goat humpers.
This is a political move by Obama, to help his standing with the rust belt.
It is not protectionism, because China is but one country. If we want cheap tires we can get them from South Korea. True protectionism would require tariffs on all foreign tires, including those European Michelins.
Smoot-Hawley was across the board and everywhere.
Protectionism was also tried before the last great depression - with what will be equally bad results. I suspect China will not take this causally - and we have a lot more to lose than they do... and lose we will...
Trouble is, they are even more expensive than American made tires. And they would probably win an international court challenge on who subsidizes the industry more as well.
I’m sure the unions asked him to do it. BTW, I need new tires for my Nissan Titan. Mostly city and highway driving. Any economical suggestions?
The WTO will reject it.
Bad business that will hurt the poor.
What the average American consumer doesn’t realize is that it is they who are getting screwed by all the protectionist policies that still exist, as well as all the subsidies that the government is providing for American producers.
We pay for all of it in the end. The real evil at work here is big government. We pay for it all, when we should be enjoying cheap products and a much lower cost of living for just about everything you can imagine. It is government and organized labor that is driving business out of this country, not cheap imports which- “on a level playing field” - could never compete with a modern automated American manufacturer.
The autowrecker. Avoid paying those enviromental fees built into the cost of new rubber. You can get an almost new set of tires from a wreck for $50, including the rims at some places.
Case in point: Ethanol is probably a bad idea in any form.
However, if we are going to use food products for fuel, this foolish idea would be LESS FOOLISH if we would use SUGAR rather than grain.
However, we will not allow the economical importation of pure cane sugar, from Brazil!
As far as ethnol from grains, I don't think anyone would be too happy if they stopped making whiskey, which is all that kind of grain is used for making, besides even more animal feed from the tailings.
As for Brazil sugar, yes, we have tariffs on buying quota's on sugar imports to force food makers to buy up American sugar. Currently there is a sugar shortage which is largely a fabricated shortage to try force those tariffs down. Brazil interestingly enough runs 80% of their vehicles on ethanol, and can still export billions of gallons of ethanol and tons of sugar if it were allowed into this country. Sad that consumers are screwed by our own government every way they turn, and are fed horse crap like 'food for fuel' and "cheap labor imports" nonsense as pacifiers.
Nah. This is better. We don’t want to reduce our standard of living to match the lowest in the world.
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.
Ethanol is stupid.
Ethanol causes inflation in food prices across the board.
Ethanol wastes massive quantities of water.
But, if we must be stupid, lets use pure sugar, at least!
Corn grown for Ethanol is taking land away from corn grown for FOOD!
(What I meant!)
I don't know why you hate Obama so much then, because turning the USA into a closed bordered "USSR" is exactly what he wants to do, and what you want.
Less than 1% of corn grown here is of the kind used for human food consuption. And of that 1%, many years 500,000 tons of it ends up in landfills.
Hybrid corn is grown for animal feed, corn syrop production, and ethanol.
Increasing ethanol production increases animal feed production because it's the proteins from the corn that are used for making animal feed, not the starches.
More animal feed = more animals for food, not less.
And last I looked, I didn’t see any soda pop shortages, or fat people loosing weight because of any corn syrup production slow downs.
The price of corn flour based food, in South American and elsewhere, has gone up a great deal due to ethanol using up too much of our corn acreage.
Absolute rubbish. The driving factors of corn prices, flours etc. is the tripling and quadrupling costs of fuels and fertilizers.
The initial price increases on the commodity markets for hybrid corn (used for ethanol) went down as initial acreages and idle land kept out of production because of subsidy programs went back into use.
The current increases of corn and corn products such as flour for human consumption are SOLEY because of fuel fertilizer and transportation cost increases. They have nothing to do with ethanol production at all, First, because that type of corn isn't even used in ethanol production, and secondly, the land put back into use for hybrid corns has actually caused the price of that kind of corn to go down on the commodity markets.
If you actually looked into things, you'd discover the truth.
Ethanol is a stupid idea!
And if you REALLY looked into the ethanol issue, Not only would you find it is a superior fuel, cleaner, and in engines properly designed to burn ethanol, produces more HP and better fuel mileage.
Plus, more ethanol production = more ethanol plants, which means more GOOD jobs for Americans. Burning ethanol sustains those jobs, plus all the money stays in America. What can possibly be better than that?
More food, and more American jobs, and more money staying in America. Hmmm. can’t have that now can we...
No respectable enineer agrees with you.
Ethanol takes almost as much power to produce as it will ever create. It takes power to plant the corn, it takes power to fertilize the corn, it takes power and water to irrigate the corn, it takes power to harvest and transport the corn, it takes power to turn the corn into ethanol.
Nothing “NEW” Is produced, as far as power goes. We are trading one form of power, in the production of another form of power, GENERATING NO NEW ENERGY!
Plus, we’ve been paying corn producers billions in farm subsidies for years to NOT grow corn, to leave their land idle and collect taxpayers money, ie welfare to sit and watch their machinery rust.
What can be better than having a market for their crops, and reducing billions in corn farm subsidies?
I long to see the day when ALL farm subsidies are canceled, and people PAY for what it actually costs to grow crops/food crops or otherwise.
But of course people will whine like theirs no tomorrow when the taxpayers no longer have to pay for their food...
It was the fuel that drove machinery before oil, and itr will be again after the oil is gone.
It's not my fault however, that you've been fed and believe a bunch of horse crap about ethanol. Seems people believe what they want to when MSM prints up an article, instead of believing that everything they print is BS that has a political angle to it. And, instead of arguing with me about it, why don't you go look it up for yourself? The FACTS are out there, plain as day. Start here: http://www.ethanolproducer.com/
In truth, there AREN'T Any!
The oil industry has accounting rules crafted for it, that make perfect sense, in that an oil well will only go DOWN in value, not UP, as reserves are depleted.
Buildings and other hard assets are not like that!
The oil industry is able to “expense” the drilling costs, known as IDC or “Intangible Drilling Costs” and allocate them per individual ownership percentages, up front.
In the end, this gives the government MORE tax money, as many or most of these wells would NEVER GET DRILLED, otherwise!
When constructing a building, there is little or no risk that the building will not be completed.
When drilling a well, there is GREAT risk, that the well will not be productive.
There is also GREAT risk that, even if productive, the well will not be profitable.
It is best, and less complicated, to allow the losses to be taken up front, and allocated accordingly per share holders or partnership interests in the well.
The, there is the “depletion allowance” which, rightfully, understands that some of the money coming from the well is a “return of capital” and also recognizes that the production from the well will decline over time, even if it is productive.
So, again, tell me why these accounting rules do not make sense?
Of course, you can't.
The Oil industry does NOT get cash subsidies.
The Ethanol industry DOES get cash subsidies.
Strawman. Certainly we should trade. Real trade means we buy product from you and you buy product from us. Real trade does not mean we buy product from you and ship jobs, factories and treasuries in return. China has multiplied its economy while being an exporting nation, ours has diminished by being the importer.
Our country was at its highest when our economy was driven by the industrial engine. It's WW II triumph was as functioning as the arsenal of democracy. Reliance on the financials, shopping centers and 'information economy' to achieve the same heights as the production economy did is showing its results currently. We have to make more of what we buy. What works for the homeowner, works for the nation.
Let’s repeat the mistakes of Herbert Hoover. And FDR. Great.
Today we have Clinton-Bush.