Barack Obama has always been a protectionist double-dealer.
He also unveiled a “Buy American” logo to attack McCain as a hypocrite for embracing Harley Davison motorcycle riders’ support simply because he opposed a federal mandate that the government buy American-made vehicles. As I pointed out last summer, “there’s nothing hypocritical about opposing coercion in taxpayer-funded purchases. Hypocrisy is dissing America First voters while nibbling on Brie at private San Francisco fund-raisers and proclaiming to be embarrassed that Americans don’t speak Spanish –and then plastering the campaign with ‘Buy American’ stickers in the hopes of winning over a demographic you hold in utter contempt.”
As a result of “Buy American” provisions in Obama’s porkulus law, Canadian companies have “retaliated with measures effectively barring U.S. companies from their municipal contracts — the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.”
Now, the tire war is on with China.
Make no mistake: This is not about protecting consumers or American jobs.
It’s about paying off Big Labor again.
This time, it’s the United Steelworkers cashing in.
Yes, the same United Steelworkers union that backed the “Buy America” provisions in the porkulus law.
And the same United Steelworkers union that employed union hatchet man-turned auto czar-turned-manufacturing czar Ron Bloom.
One more fun fact: United Steelworkers president Leo Gerard “also serves on the U.S. National Commission on Energy Policy and is a founding board member of the Apollo Alliance, a non-profit public policy initiative for creating good jobs in pursuit of energy independence.”
In trademark “Obama lied, transparency died” style, the White House sheepishly buried the decision on a late Friday night.
The WSJ editorializes:
The White House disclosed late Friday evening that the U.S. will impose stiff tariffs on imported Chinese tires used by millions of Americans. Perhaps President Obama thought he could minimize controversy by releasing the news on a weekend, days ahead of the September 17 deadline and two weeks before he will host Chinese President Hu Jintao at the Group of 20 summit in Pittsburgh. But the protectionist signal he has sent in his first major trade-policy decision is unmistakable.
Mr. Obama has applied a previously unused part of the trade law known as Section 421. This allows U.S. industries or unions to seek protection from “surges” of Chinese imports, with a lower burden of proof than normal antidumping or countervailing duty cases. President Bush nixed the four Section 421 petitions that reached his desk, citing the national economic interest.
Domestic lobbies—including unions like the United Steelworkers that supported him during the campaign and filed this case looking for a political favor in return—hoped Mr. Obama would reverse that precedent, and they haven’t been disappointed. Such congressional protectionist stalwarts as Sen. Sherrod Brown (D., Ohio) and Rep. Sander Levin (D., Mich.) endorsed Friday night’s move. “Today, the President courageously stood up and enforced fair trade rules that will save jobs and help our communities,” crowed Mr. Brown, who had enthusiastically supported the tariff proposal. It hardly matters that the 35% tire tariff is less than the 55% the International Trade Commission recommended. Despite that attempt at political and economic baby-splitting, the door is now open to more such claims.
Bob Ulrich at Modern Tire Dealer reports:
GITI Tire (USA) Ltd., a member of the American Coalition for Free Trade in Tires, already has sent out its official statement of disappointment.
“This decision will cost many more American jobs than it will create,” said Vic DeIorio, GITI’s executive vice president. “It will also increase costs for, and take away choices from, American consumers.”
With the tariff, experts believe that no[t] only will the tire companies seek cheap labor in other countries like Vietnam and Indonesia, but that more American jobs – particularly in the retail end of the tire industry — will be lost overall.
Professor Tom Prusa, of Rutg[e]rs University, completed a study to evaluate how many jobs would be saved as a result of the tariffs. The answer was none. In fact, he beli[e]ves that up to 20,000 jobs in related tire industries will now be lost as result.
Section 421 of the trade law under which the tariff will be imposed, was created as a concession to get China into the World Trade Organization.
Irwin Steltzer points out the meeting of world leaders in Pittsburgh next week has just gotten a whole lot more interesting:
[W]hen the leaders meet in Pittsburgh on September 24-25 the last thing President Obama wants is a discussion of his position on trade. He has so far managed to talk the talk of free trade while walking the protectionist walk that appeals to his trade union backers. He would like to keep it that way. Unfortunately for him, he won’t be able to do that, having just come down on the side of the protectionists…
…So picture this. Obama now has to play host to a very angry Chinese President Hu Jintao, among other world leaders, in Pittsburgh, to all of whom he promised not to repeat the beggar-thy-neighbor protectionist policies that extended the Great Depression. He needs the Chinese to continue buying the IOUs he is pouring onto the market to cover the deficits he is running up, and to allow their currency to appreciate relative to the sinking dollar. Hu needs export-based jobs. The Obama charm might just not be enough to send the Chinese president home in a generous mood, or disinclined to continue his ruminations on how to free the world of the dominance of the dollar.
Obama’s decision on tires makes it clear that he has no intention of supporting efforts to revive the almost 8-year-old Doha trade-opening negotiations. Some 36 nations met in New Delhi earlier this month and professed interest in completing a deal by the end of next year. Not likely: the recession has made jobs, jobs, jobs politicians’ central concern, and few are prepared to take the flak that will surely arise if they open their markets, and expose even a few domestic companies or farmers to job-destroying competition. The talks collapsed in July of 2008 precisely for that reason. Obama has been sitting on proposals for bilateral free trade agreements with Colombia and Korea, among others, and sees no reason to antagonize the strong, protectionist wing of his party, already unhappy with his failure — so far – to throw his weight behind a bill that would end the secret ballot in union-recognition elections, and require compulsory arbitration when union-management negotiations break down.
Here’s the latest on China’s retaliatory measures.
Where’s President Obama going to be
The AFL-CIO deployed 250,000 members to campaign for Obama — and amassed more than $53 million in worker dues to elect Obama and other union-friendly candidates.
Follow the money.
Well, this is an incredibly optimistic take from Bloomberg: Obama China Tariffs Echo Bush, Clinton Prelude to Opening Trade .