Obama Makes War On China

Of all his countless foreign policy mistakes, this could be one of the worst:

In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires from China, a move that fulfills his campaign promise to "crack down" on imports that unfairly undermine American workers but risks angering the nation's second-largest trading partner.

The decision is intended to bolster the ailing U.S. tire industry, in which more than 5,000 jobs have been lost over the past five years as the volume of Chinese tires in the market has tripled.

And there's this, too:

The U.S. Commerce Department said on Wednesday it had imposed preliminary duties ranging from 10.90 percent to 30.69 percent on $2.6 billion of steel pipe from China used to transport oil...

Why would Obama do this? Well, the surface excuse is because Chinese goods have been very successful in getting into American markets. But, instead of lowering taxes on American businesses so they can better compete with their Chinese competitors, Obama is going the opposite direction. It won't work.

The root of the problem is, as we've come to expect from Barack Obama, the unions. In both the steel and tire tariffs, the administration moved in response to requests from the United Steelworkers Union. It is interesting to note that not a single member of the U.S. tire industry supported these tariffs on Chinese tires, but that didn't matter because the union did. Remember, unions spent tens of millions of dollars and untold manpower to promote Obama's candidacy for President, and this is their payback.

RealClearWorld lays out the details of these policies, why they are bad, and why the public spin on them is simply untrue. Quite frankly, the details make my head spin, so I'm not going to post them here. You can go look if that sort of thing makes you tick. I'll just post their conclusion, which is very simple:

...tonight's decision provides ample evidence that, in the important choice between a coherent, economically-sound trade policy that advances American foreign policy interests and placating political supporters, President Obama strongly prefers the latter. ... The Section 421 decision ... forced President Obama alone to choose between--

-- the narrow interests of the United Steelworkers Union (USW); and
-- everyone else in America, the United States' image as the world's free trade leader, and the future of both the American and global economies. (More on that choice here.)

Well, choose he did. Emphatically.

It is also distinctly not a coincidence that these tariffs were made public in one of the Obama administration's late Friday document dumps, where they try to hide their dirty laundry. They've done this with abortion, their miscalculation of the budget by $2 trillion, signing statements, and other things, simply to keep it under the public radar. With the compliant media who obligingly ignore them, these things go largely unnoticed.

The problem, of course, is twofold. First is the obvious economic reality that raising tariffs will likely cost American jobs for the reasons explained above. Second, China holds the biggest chunk of American debt. If we provoke a trade war with them, they could stop funding Obama's spending binges, or even call due our current loans, and we would not be able to pay them back. What do you think would happen if we defaulted to our biggest lender? It would be economically catastrophic in terms of the value of the dollar and our standing in the world.

Just another example of the Obama administration valuing their own political points over what's good for the country as a whole. Seems like hope-n-change is pretty empty of hope and completely lacking in change, doesn't it? Unless you count starting a trade war with China, of course. That would be new and different.

There's my two cents.


Related Reading:
Tire Wars: Another Big Labor payoff that will cost American jobs