Tuesday, September 15, 2009
While labor leaders argued the move was fully justified to protect hard hit American industries, President Barack Obama’s decision last Friday to levy a 35% tariff on imported Chinese tires has sparked an angry response from Chinese Communist leaders, and could lead to a trade war between the U.S. and China.
Even though the United States International Trade Commission had previously recommended sanctions on cheap Chinese-made goods, Obama was the first president to order the implementation of tariffs under the so-called “Section 421” rule.
“By placing tariffs on imported Chinese tires, President Obama put himself in the line of fire for the jobs of U.S. workers, for the preservation of U.S. manufacturing and, ultimately, for the stabilization of the U.S. economy,” wrote Leo W. Gerard, president of the United Steelworkers International.
Gerard added that the tariff comes at a risk, and Chinese officials wasted little time in responding, saying they would investigate alleged dumping of U.S. automobile parts and chicken products in China.
Eswar Prasad, professor of trade policy at Cornell University, said the tit-for-tat could “easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries.” He added: “This could certainly turn ugly quickly.”
It also could make for a tense set of meetings at the next G-20 Summit, scheduled for September 24-25 in Pittsburgh, where Chinese President Hu Jintao will meet with President Obama, along with other world leaders.
-Noel Brinkerhoff
Finally, a President with the Guts to Enforce Trade Laws (by Leo W. Gerard, Huffington Post)
Obama's Tire Tariff Draws Beijing's Ire (by Steve LeVine, Business Week)
China-U.S. Trade Dispute Has Broad Implications (by Keith Bradsher, New York Times)
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