President Obama is currently not making many friends (which is great for news-mongers like us at US Democrazy).
So who is the Presidential fighting with now? Bring it on China!
It appears Obama is tired with Chinese made tires. So tired, in fact that he has decided to impose a tariff on Chinese tire importers.
Needless to say, our far eastern friends are finding this quite tiresome. So tiresome, in fact they are threatening a TRADE WAR!
Now don’t think Obama decided to annoy our biggest trade partner just for the fun of it.
He did so because the U.S. International Trade Commission, a non-partisan federal organization specializing in trade, stated
that certain passenger vehicle and light truck tires from China are being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products.
This means Obama can implement Section 421 of the 1974 Trade Act which allows for the US to protect against surges of Chinese products (but you all knew that because you have all read Section 421 of the 1974 Trade Act).
Obama was also prodded by the United Steel Workers who voiced their concern in a letter arguing that
China and the importers of its products have engaged in a well funded and orchestrated plan to protect their interests and subvert Congressional intent.
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Now is the time to finally draw a line in the sand: The American people work hard and play by the rules and they deserve a government that respects their interests and fights for their jobs.
Now that the news is out …the pundits have tirelessly chipped in…
Mike Shedlock warns that
If Obama keeps this foolishness up, which right now seems highly likely, he risks a global trade war similar to the global trade crash kicked off by the Smoot-Hawley Tariff Act signed by President Hoover in the early stages of Great Depression.
China is already starting to show signs of a retaliatory stroke, investigatingUS poultry imports.
Over at the Nightly Business Review, Stephanie Dhue, is trying to calm fears to trade troubles reminding us that
The 35% tariff President Obama just imposed on tire imports (for the 1st year, phased out over 3 years) was 20% lower than what the U.S. International Trade Commission recommended. And, the threat the Chinese made to support tariffs on U.S. auto parts and poultry is a measured response. Those industries represent less than 2% of U.S. exports.
Phil Levy, writing for Foreign Policy notes that
U.S. tire producers did not even support the case; they said they were more interested in producing high-end tires. The petition was filed by the United Steel Workers. If U.S. tire producers are uninterested, then there is little prospect of gains for American workers. The tires will just be sourced from other countries at somewhat higher cost.
Chris Brown, of the Financial Times, suggests that Obama’s best choice
is to decline to implement new trade barriers, but to offer the adversely affected communities in the US help through adjustment assistance programmes. Doing so will help the US stand up for the trading system and counter the crisis-driven mob mentality that threatens to bring it down.
Enough of the talking heads (after a while they Stop Making Sense), what do you think? Is there a better solution for our trade troubles? Is Obama tariff terrific or is it just going to tire our relations with China? Are more tariffs needed to protect American jobs or is free trade the key to a stronger economy?
