Obama's Tire Tariff

[lan_dawei]

I am a proponent of free trade and think that Obama is paying off some Union debts. Most people only consider the benefit to the domestic producer, but fail to comprehend the impact to the domestic consumer.

Here are two articles about the recent Obama Tire Tariff.

http://money.cnn.com/2009/09/14/news/co ... ney_latest

http://www.theautochannel.com/news/2009 ... 77450.html

I hope the President rescinds this tax. It will hurt people on
both sides of Pacific! It will hurt people in the US who are watching there dollars and it will hurt workers in China.

[paglino9]

Here is a great post as always by james Fallows on the Tire Tariff issue

http://jamesfallows.theatlantic.com/arc ... _tires.php

He cautions against whipping up a fervor storm, and crying wolf over trade protectionism.

From what I have read, there was an "anti-dumping case" that was brought against China in I think the International Trade Commission and the results found that indeed Chinese tire companies were illegally putting under priced Chinese produced tires into the US market.

"The International Trade Commission had already determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the president impose the new tariffs. Members of the commission, an independent government agency, voted 4-2 on June 29 to recommend that President Obama impose tariffs on Chinese tires for three years."
Here's the link to that article
http://www.nytimes.com/2009/09/12/busin ... iff&st=cse

So in response to tire tariffs, the Chinese government decided to play hardball cutting off Chicken feet imports from the U.S. Here's the NYT article that explores these interesting dynamics. Really interesting stuff.

http://www.nytimes.com/2009/09/16/busin ... eet&st=cse.

[paglino9]

I just now remembered a personal story in which I was taking a bus from Anhui, Hefei to Henan, Zhengzhou. The bus blew a tire in the middle of nowhere, and we had to wait 4 hours to get the show back on the road. At the repair shop that the bus limped into, the mechanics wanted me to read what was on the tire. Yep, sure enough. Michellin model tire made in Michigan I believe. Said only for use in North America. I guess that voided the warranty.

[lan_dawei]

I find an emotional word such as "dumping" and the concept of an illegal price interesting. For a price to be illegal, some sort of government entity must decide what is "legal". I find that very disturbing. Isn't the market place a better judge of pricing than any government?

If someone wants to sell an item for such-and-such a price and another party wants to pay that price, what is wrong with that? Prices for commodities fluctuate with supply and demand, that is tough to fairly regulate. IMO any government should butt out and keep out of voluntary transactions between parties.

I am an American, and am critical of many instances of the US government protecting American business interests at the expense of foreign competitors. We often hurt foreign farmers and then sent foreign aide to their nation. Why not give them the dignity to work as most would like?

[david]

While I agree with Lan Dawei, China has been playing with fire with its export-oriented development approach for some time, especially in amassing such a large and public volume of foreign currency reserves, and not seeming to do much productive with it.

The last year would have been a great opportunity for China to significantly upgrade things like its healthcare system and increase imports from countries like the United States. Public policy in response to the financial crisis on this end seems to have involved mostly pressuring banks to extend stimulus loans to major industries in ways that just pump more money into the real estate markets.

It's too bad that the people who will feel the pain have very little in common with those setting policy in both countries.

[david]

Maybe I should eat my words. Just caught this in the news - it's a big step in the right direction!

http://www.bombardier.com/en/corporate/media-centre/press-releases/details?docID=0901260d800acfd9

Excited!