Next In Line For US And China’s Trade Battle

Before China was even able to retaliate to the United State’s tire tariff, paper manufacturers have submitted their trade complaint to Washington, (here) hoping to get the same protection that Obama granted to the USW involving American made tires vs. Chinese ones.  Ever hear of the saying “If you give a mouse a cookie then it will ask for a glass of milk?”

What doesn’t irk me is Obama’s move towards a more protectionist policy. (OK, it does a little bit) In fact it would be nice if he was able to outline exactly the policy he was going for.  Instead, we are left with a very vague international trade policy.

The tire tariff was supposed to be a political move, albeit a risky one.  Obama was expecting support from labor unions for upcoming health reform at the price of souring international trade policies.  Pundits all over expected this to be the beginning of a trade war as China obviously tried to retaliate by evaluating their own tariffs on chicken feet and auto parts.

Already you can see how poorly this went.  Not only are union workers worse off now since a larger and more important sector, auto parts makers, may lose out to exporting to growing Chinese markets, Obama is now facing the domino effect everyone expected: other unions who feel that they are being threatened now expect the same protection.

There are many ways this issue can be approached that doesn’t have to be an all or nothing game against American manufacturing vs Chinese imports, but this is something that shouldn’t be hanging over the administration heads now.  Obama has more important things to focus on, like healthcare reform.

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One response to “Next In Line For US And China’s Trade Battle

  1. Pingback: Tire tariff costs U.S. $1.35 billion in lost savings « Pushing Possibilities

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