Did the U.S. Really Win the Tire Fight with China?

The headline in The Wall Street Journal was “U.S. Wins China-Tire Fight,” and proceeded to detail how the ”World Trade Organization handed the U.S. a big victory in a fight with China over tire imports, bolstering the Obama administration’s effort to show it is tough on enforcement as it girds for a battle in Congress over passage of a free trade pact with South Korea. The WTO’s Dispute-Settlement Panel ruled last Monday in favor of President Barack Obama’s decision in September 2009 to levy tariffs of up to 35% on Chinese tires.”

But did the US really win? Last year on “Truth for America” in the midst of this legal battle our featured guest was Marguerite Trossevin, who represents a coalition of U.S. tire companies that import Chinese tires. On the show she said any tariff decision would actually harm consumers and predicted price increases for U.S. consumers and losses for U.S. tire importers.

The hidden truth, according to Ms. Trossevin, is that the big US tire manufacturers do not want to manufacture cheaper tires, because they don’t make money on them. So for the United Steelworkers Union, which has lodged a series of trade complaints against China, to claim that it will cost the U.S. jobs is pure nonsense. Not a single U.S. manufacturing job will be lost, but there will be job losses for smaller tire companies that stock Chinese imports to meet the needs of budget-minded drivers.

In addition, in our poor economy, many U.S. car owners cannot afford expensive tires when their tires fail, and must rely on cheaper Chinese tires to keep them safe. Without Chinese imported tires, they will simply forestall buying tires, adding a risk to their driving.

“The ruling was a victory for the United Steelworkers”, according to its President Leo Gerard, who applauded the Obama administration for “standing up and defending American jobs.”

That is not protecting American jobs, that is simply protectionism, which is counterproductive to a robust trade policy and acceptance of free trade policies.

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