When President Barack Obama imposed a new tariff on Chinese tire imports, the Chinese responded by saying they would impose tariffs on U.S. vehicles and poultry. The result: a new trade war that will do nothing more than drive up prices, because that's what protectionist measures do.
The Financial Times reports: "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."
China has accused the United States of violating World Trade Organization rules with the tariff.
"The decision to impose extra tyre tariffs followed a petition by the United Steelworkers union, which represents workers at many US tyre factories. Official US figures show an increase in imports by volume from 14.6m tyres in 2004 to 46m in 2008. The US data shows that the value of tyre imports from China increased from $453.3m in 2004 to $1.8bn in 2008. Four US plants closed in 2006 and 2007 and three more are likely to be closed this year. US production capacity has fallen by 17.8 per cent in the past four years, according to the official data."
http://www.ft.com/cms/s/0/f67c6fe6-a024-11de-b9ef-00144feabdc0.html


Comments: 312
There has been an unfair balance of trade with China since Nixon.
There's nothing wrong. You could find an American-made one if you looked hard enough, but you'd damn sure pay more for it. That's part of the problem. Government mandated wages and the second highest corporate tax rate in the world means that it costs more to produce something here than it does somewhere else.
"Buy American" simply means "Pay More."
I cannot believe you are advocating China and their workers over good old american workers.
Is this the "change" the GOP is spouting off about?
Funny you didnt add that part to your article.
You're making a lot of assumptions there about wages, etc. Try reading some Adam Smith. Great economics lessons on free trade and the consequences of protectionist measures.
I'm not. But I do understand that it costs more to produce products here than it does elsewhere. There's no escaping that reality, Lori.
I didn't want to make it look any worse for the President. Siding with unions on a measure that causes an increase in prices and reduced consumer choice is NOT A GOOD THING.
No bigger than the assumptions you are making about China being able to do irreversable harm to the poultry and car industry in America.
The difference is I am willing to take the chance if it means more Americans have jobs to buy more tires and poultry and cars.
Whereas you are more worried about China.
More BS.
I didn't want to make it look any worse for the President. Siding with unions on a measure that causes an increase in prices and reduced consumer choice is NOT A GOOD THING.
So now you are worried about the choices that consumers will have to make with all the money they DONT have because all the business have moved their operations elsewhere.
As far as it looking bad for a president I agree...Bush looks more like an ass every day. And a greedy one at that.
"I cannot believe you are advocating China and their workers over good old american workers."
I'm not. But I do understand that it costs more to produce products here than it does elsewhere. There's no escaping that reality, Lori.
Hmm reality.... that is COSTS more of there is LESS of a profit.
I didn't say anything about irreversable harm. Harm yes, but irreversable no.
"The difference is I am willing to take the chance if it means more Americans have jobs to buy more tires and poultry and cars."
So am I. I buy American whenever I can. I especially love my two giant American SUVs. But that doesn't change the realities I've laid out for you. Not everyone can afford to pay more for a product.
Choice means competition. Competition means lower prices. What's not to like?
Trade wars mean higher prices. Is taht what we need right now?
Oh thats right American jobs and business'.
No one could lower their costs that much.
But there's like a billion of them. Lower the cost, demand goes up, and more people buy. That's supply and demand, Lori.
You are really going out on a limb on this.
Enough already. I am willing to pay a bit higher if quality goes up or to even get other markets involved.
Try reading your own Wall Street bible: "China's quick action in taking the U.S. tariffs to the WTO suggested Beijing is eager to keep the trade tensions within the framework of international law, a sign the disagreement is containable."
Any other president would garner praise from the hypocrights for standing up to Chinese dumping. You can choose between a large helping of crow, or Chinese poultry, when Obama finishes facing down the Chinese. They're desperately dumping because their exports are down.
Losing an election doesn't justify you "summer soldiers" turning anti-American on every issue that comes along.
Kudo on that one Guy.
"Losing an election doesn't justify you 'summer soldiers' turning anti-American on every issue that comes along."
I'm not opposed to everything President Obama does. In fact, here are some of President Obama's actions that I support totally:
1. Continuing third country renditions for terrorism suspects.
2. Continuing indefinite detentions without charge.
3. Bringing back war tribunals.
4. Expanding the war in Afghanistan.
5. Delaying large troop withdrawals from Iraq until sometime next year.
6. Allowing the CIA to continue to operate short-term, overseas detention facilities.
7. Continuing warrentless wiretapping.
8. His tax cut (although I wish it had been larger and permanent instead of temporary).
9. His inclusion of lobbyists in his administration (they are some of the foremost policy experts in the country).
10. His demand that Iran cease uranium enrichment before direct talks can occur.
11. His support for Bush's state secrets policy.
12. His agreement to closing the loophole in healthcare reform legislation so that citizenship verification could occur.
This is unreal.
You say Made in America means Pay More.
Importing tires from china has cost 7,000 jobs..now think about that....the town I live in only has 3,000 people so it is like putting 2.2 towns my size out of business and thats not counting on the business that depended on those tire industries and how many people they had to lay off.
I am personally surprised at YOU AC.
Made in America does mean pay more. We have higher manufacturing costs (labor, regulatory requirements, etc.) and the second highest corporate tax rate in the world (second only to Japan). That means it costs more to produce goods, resulting in higher prices for those goods.
How long are we going to be the world hypocrits and do things like invade Iraq to keep the world safe for democracy but then continue to support China who's premier is no 3 on the list of violations of civil rights.
So feel free to continue to support communism and pollution and civil rights violations....I will continue to support my country.
Depends on how you define costs, but if you do it monetarily, we have higher costs.
"...but then continue to support China...."
Every President since Nixon, Republican or Democrat, has followed essentially the same policy toward China. It's not a political thing, but a US foreign policy thing.
"...they have NO EPA standards whatsoever."
That's exactly why any climate change legislation or international agreements are meaningless. China and India, the top two polluters, refuse to go along. That's why our Senate refuses to ratify Kyoto. It would impose costs on us that other countries would not be subject to.
I don't support communism or pollution or civil rights violations, but our national government has for decades, no matter who's been in office.
I guess if you make absolutely wild accusations, there isn't anyone who can deny it.
Are we forgetting how wrong you are here, NoBama, because you were right other times? Did this not happen? Well delete the post, stop wasting my time, and learn to drive in one lane.
I then pointed out to you that I support President Obama on a host of issues, and listed those issues for you. Hell, today I can add another one to the list now that the White House has said terrorism detainees at Bagram will NOT have access to U.S. courts (continuing another Bush policy).
I am curious about how you feel with regard to the Bush policies continued or expanded by President Obama. They have nothing to do with this particular thread, but are instead a response to a comment made by you.
So, what say you?
featured in Purely Political
with thanks
Mark
Obama calls up Chinese Premier Wen Jiabao
Obama: Hey Wenny baby I have a bit of a problem....seems that you exporting cheaply made tires has put a lot of Americans out of business and well if you would stop I would appreciate it.
Wen Jiabao: Haha we have America by the balls. I will throw a couple of million yen your way and you just play nicely. OK Comrade?
Obama: No sorry thats not what I am about.
Wen Jiabao: You americans make me laugh...thats the same line that Bush tried before Cheney knocked the phone out of hands and put Georgy in time out.
Obama: No really I mean it.
Wen Jiabao: You dont have the balls to do it.
Next days headline: OBAMA STARTS TRADE WAR.
You either try and make the unfair trade imbalance more balanced or you dont. If Obama would have gone to the Chinese government and tried negotiating with them do you really think they would be OK with it? Would they have cut production and export by 10, 15 25%?
What did you want him to negotiate?
What would you have the ultimate goal be?
It would have made him not look like a hypocrite who campaigned on always talking first and acting only when absolutely necessary. You know, breaking from the pattern of the last 8 years.
Wrong. He said he was going to do just this and he did.
Afraid not. Diplomacy first, remember? Or was that just campaign rhetoric?
What would have been the goal?
Obama: You guys need to cut production and imports to the US.
China: No
Obama:OK
Things go on as usual.
He could have registered a complaint with the WTO. That's what China did, and it's the kind of diplomacy he campaigned on.
And that would have accomplished what?
BTW did you notice the related article at the top on the right side of this is the AP article on how Obama DIDNT start a trade war.
It would have fulfilled his campaign promise, and it would have been the diplomatic thing to do.
No AC one of his campaign promises was to end unfair trade and impose tarrifs for business that move their production out of the USA and to start eliminating the unfair trade with China.
Just add "while engaging in dialogue with other nations...."
Wasn't Bush criticized for taking action without talking?
If so, then it would seem that AC's claim that President Obama has launched a trade war with China is, as Lori put it, a big steaming load of "horseshat."
"I especially love my two giant American SUVs."
A giant American SUV? I wasn't aware such a thing existed, AC. Is this more of your equine excrement?
"I wasn't aware such a thing existed, AC."
One Suburban and one Expedition. Plus a Harley ( a gas guzzler by motorcycle standards).
Whether it gets any attention or not, it's still a lie.
"One Suburban and one Expedition."
According to Wikipedia, Suburbans are assembled in Jacksonville, WI; Arlington, TX; and Silao, Guanajuato (except for the 2009 models, which are assembled exclusively in Arlington). And according to the US DOT, they're made from between 61% and 70% parts from the U.S./Canada.
Expeditions are built in Wayne, MI and Louisville, KY and use between 70% and 95%(2007 model) parts from the U.S./Canada.
Harley's are also built with foreign-made parts, and aren't SUVs.
Giant American SUVs? I don't think so. More like a couple of bullshit-guzzling Trollmobiles.
Oh, grow up.
"According to "Wikipedia...."
I would suspect that most of the cars sold in this country have parts or labor involved from another country. Globalization has made this a very interdependent world. But at the end of the day, both Chevy and Ford are traditional American companies, largely assembled in the United States. That makes them American SUVs in my book.
Sounds like you have a problem with gas guzzlers.
I'm grown up enough to know the truth from a lie. Apparently you were hoping for less grown up readers.
"But at the end of the day, both Chevy and Ford are traditional American companies, largely assembled in the United States."
GM and Ford are U.S.-based multinationals with vehicles assembled all over the world.
"That makes them American SUVs in my book. "
Your book is filled with a lot of lies and bullshit, AC.
"Sounds like you have a problem with gas guzzlers."
I have more of a problem with lying trolls.
Sounds like I've struck a nerve with you. Get over it.
Thanks for the sentiments. It warms my heart.
So do I.
"...deliberately dishonest...."
Oh no, Wil doesn't approve of me. Whatever will I do.
Boo hoo, quit whining and grow up already.
Whether I approve or not has nothing to do with the fact that you're a liar and a troll.
"Whatever will I do."
I would imagine that you'll keep lying and trolling.
"Boo hoo, quit whining and grow up already."
I'm not whining. I'm pointing out that you're a liar and a troll. Deal with it, loser.
Yes, you are. And to be honest, it's kind of pathetic.
I don't think you could be honest if you tried, AC.
Whine all you like, AC. But you ought to stop all the lying and the trolling.
If this is all about trade, great. It's about time. Impose more tariffs, they demand us to pay them, we lower our currency, impose further tariffs, and... err, I don't know what then. Somebody up there MUST know what they are doing, right?
Annin & Co. has been making flags in the U.S. since 1847. They made the flags that have been used at every presidential inauguration since Zachary Taylor. They employ about 500 people at manufacturing plants in Verona, NJ; South Boston, VA; and Coshocton, Ohio.
You can use the store locator on their website to find out a store near you, and if you want to shop online, you can get them from Martin's Flag Company, a family-owned and operated business in Fort Dodge, Iowa.
Shameless plug for Martin's.
But I'd suspect it cost more than the one I bought at Wal Mart (made in China).
And why is that AC? Wait I know....because of things like American business either moving their HQ to places like China or buying cheap Chinese made products so they can still make big profits.
You're obviously able to spend more when a less expensive choice is available. Not everyone has that luxury.
"China has reacted to the president's decision with vehemence, charging the United States with 'serious commercial protectionism' and vowed retaliation."
"The president campaigned on a platform focused on trade remedy enforcement, so delivered on at least part of his campaign promises to a critical part of his political base. He would have been subjected to heavy criticism by organized labor had he rejected the request for tariff protection."
"The administration has been quick to point out that invoking a provision of U.S. trade law to which China agreed in 2001 is not necessarily 'protectionism.' Even so, the president's decision is unquestionably a capitulation to domestic political interests that are averse to open markets and free trade. As such, the decision cannot help but cloud discussions between the United States and China at the upcoming G-20 and cast a pall on the administration's credibility in any efforts to discourage protectionism as part of global economic recovery programs going forward."
"...the new tariffs only apply to imports from China; so one possible result will be a shift of imports from China to other low-cost production countries, many of which have capacity to expand production for the U.S. market."
"Consumers will be hurt by the decision, because tire prices will inevitably increase (although perhaps only marginally, since imports from other markets will supplant those from China)."
"More broadly, the retaliation China has threatened will almost certainly hurt the business community and its ongoing plans for expansion in China's market."
"The special safeguard provision in Section 421 is particularly sensitive within China because it only applies to China and therefore is perceived to be inherently discriminatory against China."
"Accordingly, sensitivities to the provision run deep, and China's domestic politics will demand some retaliatory response to the president's decision. Retaliation will almost certainly affect U.S. economic interests in China, which could, unless cooler heads prevail, lead to tit-for-tat protectionism."
I can find 100 different sites and think tanks and whatnots that agree with what I say..does that make me always right?
Also conveniently left out of the discussion are the issues with China's "Buy Chinese" policy that was a part of its economic stimulus policy earlier this year, as well as the WTO ruling last year that found that China had illegally imposed tariffs on foreign-made auto parts. Seems like an ongoing thing to me, which doesn't really fit in with the plan to blame Pres. Obama for starting (or launching a trade war, does it?
"...too much at stake in positive economic relations to allow a total meltdown in commercial relations."
You can have a tit-for-tat trade war without a "total meltdown."
"You can have a tit-for-tat trade war without a "total meltdown."
You can have a square dance with a "total meltdown", too. But Freeman didn't say this thing with the tires was a square dance or a trade war.
And this article at wsj.com does a good job of explaining why this isn't a trade war.Peter Ford's article in the Christian Science Monitor also says it's not a trade war. And speaking of the CSM, they also said it wasn't a trade war when Bush imposed a tariff on Chinese glossy paper a few years ago.
Were you complaining about Bush launching a trade war back then, AC? And if so, then how can Obama be launching a trade war in 2009 if Bush had already launched it in 2007?
Ah, I see. I suspect a lot of folks would disagree with that logic. Doesn't non-partisan mean objective and unbiased? So you're saying that right wing neocons can be unbiased and non-partisan?
"This is not a trade war."
Will you hold fast on that line if China imposes tariffs on U.S. automobiles and poultry?
"Were you complaining about Bush launching a trade war back then, AC?"
Yes. I oppose all protectionist measures, except in certain cases of technology deemed critical to the national defense.
"And if so, then how can Obama be launching a trade war in 2009 if Bush had already launched it in 2007?"
These things come and go. There's a lot at stake and these little flare ups, skirmishes in the overall war for the balance of trade if you will, happen and then the two sides calm things down. Then they heat up again. Then they calm down again. See how this works?