Sunday, September 13, 2009

Obama Slaps Import Tariff on China

In a move that I think was meant to keep a lid on this bit of good news getting out to vocal defenders of free trade, Barack Obama has quietly approved an International Trade Commission move to place a stiff tariff on imported Chinese tires.

On Friday evening.

Originally, the ITC wanted a 55% tax that reduced by 10% over a 3 year period, but Obama decreased that in his executive order to 35% the first year, reducing by 5% per year for 3 years.

Still it is a significant action. An action that is past due by at least two rationales that I can think of off the bat.

Rationale 1: The Chinese tire industry specializes in low-end tires that undercut higher quality (and therefore more expensive) American-made tires. This alone is responsible for the loss of over 5000 American jobs since 2002 according to the United Steelworkers union.

Rationale 2: It may be recalled that over 450,000 tires that were manufactured in China were subject to recall by the Feds in 2007. Chinese tires were blamed for a 2006 accident that killed two. The rationale for the recall back then was that the Chinese tires did not have a safety feature, a gum strip that binds the belts of a tire together.

We have heard one story after another about the shoddy work that goes into Chinese manufactured goods. These cheaply-made products have enjoyed years and years of the Bush-sponsored free market. It is now time to step back in to ensure that Americans are not harmed by low-quality cheap products.

Tires are a good start, but you can be sure the Chinese aren’t going to be taking this well, especially when there are so many of their products that can and should also be examined more closely.

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