Chinese tire tariff bad for consumers
Published 5:00 am Wednesday, September 16, 2009
Don’t blame Les Schwab if the price of tires rises soon. The Central Oregon-based retailer is just one of many that might be forced to adjust in the wake of a new tariff imposed on Chinese tires by the Obama administration.
The administration announced late last week that it would begin imposing a 35 percent tariff on tires imported from China. In doing so, the president cited a surge in imports of the tires that arguably threatens the jobs of Americans who work in the tire manufacturing industry. There’s no doubt tire imports have grown dramatically, from 5 percent of U.S. consumption in 2004 to 17 percent last year, according to the Washington Post.
It should come as no surprise that the Chinese haven’t responded particularly well to the tariff. They’re arguing U.S. information about tire imports is inaccurate, and they’re threatening to impose tariffs of their own, on automobile parts and U.S.-grown chicken.
Some economists say all this may well be the beginning of a new trade war, while others argue that it’s China, not the U.S., that has the most to lose if that were to occur. They note that Chinese imports to the U.S. far outstrip U.S. exports to China. Too, they say, while China is a major investor in U.S. Treasury bonds, and therefore is critical to U.S. economic health, this country remains such an attractive place to put China’s money that investment in bonds is almost certain to continue.
All of which is the stuff of newspaper articles and opinion pieces, but misses the point that’s most important to the average American. A high tariff on Chinese tires may well raise the price on all tires sold in this country.
In reality, if the tariff makes anyone happy, it’s American labor unions. In fact, we suspect it was their support for Candidate Obama that led President Obama down the tariff path. He owes unions, he knows, for the major role they played in his election, and this is one way he can begin repaying his debt.
It’s nice, we suppose, that Barack Obama is so concerned about the emotional and financial well-being of the 12.5 percent of Americans who belong to labor unions. Too bad he’s not equally concerned about the 87.5 percent of Americans who do not.