Saturday, June 20, 2009

Major trade decision coming up for the administration

The Steelworkers' union has succeeded in their petition to a US trade body to determine that Chinese tire exports are hurting our domestic tire industry. What remains is for President Obama to approve the request for relief, which would result in quotas and/or tarriffs on Chinese tires, or to reject it. Bush rejected all four such petitions that he received during his Presidency.

While this is a major decision, I don't see it as a particularly enlightening example of Obama's thinking on the issue, whichever way he comes down. We do not have a free trade agreement with China. China is a very protectionist nation and likely wouldn't be interested in the first place. While I am a big supporter of free trade, I believe it must be on the basis of mutual agreements with our trade partners. Since we don't have an agreement with China, I don't really think it makes Obama a protectionist if he grants the steelworkers' union relief and imposes tarriffs on Chinese tires.

Now if it was a complaint about Mexican tires, I'd be throwing a hissy fit on this blog.