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Guang Ming Daily News, China

Tire Tariffs Hurt
Everyone’s Interests

By Ming Jinwei

Given the current global economic climate, Obama’s government is setting a terrible example and ruining the U.S.’ supposed free-trade supporting image.

Translated By John Yu

12 September 2009

Edited by Alex Brewer

China - Guang Ming Daily News - Original Article (Chinese)

As the world collectively struggles to deal with the financial crisis, the U.S. took mutually harmful measures two days ago by imposing a punishing three-year tariff on Chinese car and light truck tires. A compromise, or capitulation, to domestic political pressure, this serious trade protectionism violates WTO regulations. Given the current global economic climate, Obama’s government is setting a terrible example and ruining the U.S. supposed free-trade supporting image.

Trade protectionism is a dead-end, because such unfair, unreasonable measures inevitably end up harming the both countries involved. Not only futile in solving the United Steelworkers’ unemployment problem, these tariffs will also seriously affect tens of thousands of people working in tire import, sales, warehousing and other fields that depend on Chinese imports. It will even hurt US consumers and weaken the government’s ability to revive the automobile industry.

This tariff violates U.S. promises made at the G-20 financial summit. According to an AP commentator, Obama denounced trade protectionism and wishes to express his support of free trade in anticipation of the upcoming Pittsburgh financial summit. Unfortunately, other nations are likely to view tire protectionism as a test of this commitment. The article points out that the “Buy American” provision of last year’s economic stimulus plan already aroused suspicion among other nations, who think the U.S. only decries trade protectionism when its own industries are not threatened.

What a shame that the trade issue should become the victim of domestic political wrangling. The U.S. government is ignoring the vehement protests of importers, dealers and the Chinese government in order to curry favor from an interest group and obtain support for Obama’s health care reform. According to Gary Hufbauer of the Peterson Institute of International Economics, health care reform is at a stalemate, and to reach a compromise, Obama is unwilling to alienate union-supporting Democrats over issues such as tire trade.

The worst global recession since the World War II has started to stabilize and show signs of improvement, but the road to recovery is full of uncertainty. As the world’s greatest economic power, the U.S. is sending the wrong signal by renewing trade protectionism at this critical juncture. As WTO deputy director-general Alejandro said, imposing punishing tariffs on Chinese tires does not benefit trade or recovery of the global economy.

Trade protectionism hurts everyone. The U.S. should learn from its unwise policies of the Great Depression, when it took the lead in spiking import tariffs, exacerbating the crisis and setting off world-wide trade wars. Seventy years later, it should not be repeating history’s mistakes. As stated by Patrick Rosenstiel, executive director of the Trade Alliance to Promote Prosperity, the government should be creating more jobs, because economic recovery lies in reasonable rather than confrontational economic policies.



One Comment So Far



One Response to “Tire Tariffs Hurt
Everyone’s Interests”

  1.  Vote: Add rating 0  Subtract rating 0   Jim R Says:

    I must respect­fully dis­agree on sev­eral points, Mr. Jinwei.

    First of all our elected rep­re­sen­ta­tives have lost sight of the fact for years that “We The Peo­ple” have every right to deter­mine what role we will allow trade with other coun­tries to play in our society.

    It is a means to an end only, namely cre­at­ing a just, equi­table and pros­per­ous soci­ety for the most peo­ple pos­si­ble; but sadly one tool that has proven irrefutably to have played a dev­as­tat­ing role in declin­ing liv­ing stan­dards for the vast major­ity and obscene prof­its for the very few.

    As to your undoubt­edly gen­uine con­cern for all of those Amer­i­can work­ers depen­dent upon the wages they earn par­tic­i­pat­ing in import­ing and dis­trib­ut­ing those goods we mostly used to man­u­fac­ture our­selves; these jobs largely pay half of the wages earned by skilled man­u­fac­tur­ing work­ers in small com­mu­ni­ties across Amer­ica — these high pay­ing jobs were the anchors of our vil­lages and towns that allowed mid­dle classs work­ers to send their kids to col­lege and enjoy a mod­icum of com­fort in their retire­ments — no more.

    Also, the actual effect of pro­tec­tion­ist trade poli­cies in the throes of the Great Depres­sion have been esti­mated by Nobel win­ning econ­o­mists to have been only 2–3% of GDP.

    Your cri­tique of our stim­u­las money being directed largely to Amer­i­can com­pa­nies is inter­est­ing in light of China’s own stim­u­las direc­tive to spend your own domes­ti­cally — some­thing I entirely agree with by the way. I’d ven­ture a guess your coun­try will far more suc­cess­ful at that than mine.

    There are many other groups like the Peter­son Insti­tute that have grown pow­er­fully in Amer­ica over the last forty years with two pri­mary goals:

    1) Spread dis­in­for­ma­tion and pro­pa­ganda to manip­u­late igno­rant Amer­i­can work­ers into vot­ing against their own self inter­ests and our Democracy.

    2) Con­tin­u­ally exploit the results for the obscene gain of the very few oli­garchs allowed into the club — while they dis­cuss ways to gain more power, money, and influ­ence over our bought and paid for cor­po­rate ser­vant politicians.

    We hope to change that now. I’m con­fi­dent our respec­tive peo­ples can fig­ure out a way to trade fairly with­out dec­i­mat­ing our soci­eties or our planet.

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