[Guest post by DRJ]
More Friday night news from President Obama regarding protectionist tire tariffs.
“Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.
In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
The decision to impose extra tyre tariffs followed a petition by the United Steelworkers union, which represents workers at many US tyre factories. Official figures show an increase in imports from 14.6m in 2004 to 46m in 2008.”
China says it will investigate the need for tariffs on imports of US poultry and vehicles, and the U.S. responded by warning China not to retaliate.
How seriously will China take a warning not to retaliate? After all, the world apparently realizes Obama talks the talk but he doesn’t walk the walk, something that could have serious ramifications:
“Governments around the world have suggested the U.S. talks tough against protectionism only when its own industries are not threatened. U.S. rhetoric on free trade also has been questioned because of a “Buy American” provision in the U.S. stimulus package.
The tire decision could have ramifications on issues such as the nuclear disputes with Iran and North Korea and on efforts to address climate change. China is the world’s third-largest economy and a veto-holding member of the U.N. Security Council.”