Prepare to Pay More for Tires

The Obama administration decided on September 11th to put steep tariffs on China tires.  The measure was at the behest of the US Steelworkers Union and, notably, opposed by the US tire industry.

The rationale was not a specific accusation of dumping or market manipulation, but rather a “safeguard” clause which seems to apply only to China as a condition of their entry into the WTO.  Under the safeguard provision, American companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that American producers have suffered a “market disruption” or a “surge” in imports from China.

Hmm.  So according to this “safeguard clause”, if the Chinese develop near zero cost solar panels then while the rest of the world enjoys almost free energy, our solar panel producers will have the right to say no you have to buy our panels instead and pay X times the amount of dirty coal for your energy.  Which means we would still be using coal for most of our energy, spewing out pollution, and still paying more for our energy.

Hypothetical example yes, but at the margins these policies mean our consumers will suffer.  And these consumers include industries who consume tariffed goods, meaning they will be less competitive, less profitable, and employ less workers.

Read more on tire tariffs.

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