9/13/2009

Is Obama moving towards a trade war with China?

Sure the steel workers' union members and Goodyear will benefit from these tariffs, but other companies and consumers as a whole will be hurt. Why should the government subsidize jobs for those making tires, but make jobs for workers at Ford who have to now sell somewhat more expensive cars more difficult? From the Financial Times:

A full-blown trade row erupted on Sunday night between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles.

Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.

In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.

Chen Deming, China’s minister of commerce, condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades.

“This is a grave act of trade protectionism,” Mr Chen said in a statement. “Not only does it violate WTO rules, it contravenes commitments the United States government made at the [April] G20 financial summit.” . . . .

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3 Comments:

Blogger Angela said...

We need to get out of the WTO. I'm hard pressed to support Obama on anything, but fair trade is far more sustainable than free trade. It's constitutional, and I'd slap tariffs on everything imported, especially stuff made by American companies on foreign soil essentially protected by American troops.

Doing what's best for the world instead of what's best for America should be considered treason.

9/13/2009 7:51 PM  
Blogger Skullz said...

"...it contravenes commitments the United States government made at the [April] G20 financial summit."

The US government has been contravening commitments to it's own people for a long time. Welcome to the party, pal.

9/13/2009 8:20 PM  
OpenID edwardveiga said...

Angela, you would be a great economic advisor to the president. To the president of Zimbabwe, that is.

9/14/2009 10:48 AM  

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