Just What We Need…Another Trade War

You’d think that by now, American politicians would have learned that trade wars are a never-winning proposition. Since the Great Depression, when tariff’s slapped on items imported into the U.S. exacerbated the worldwide economic slump, American politicians have failed to read their history books.

Now it’s Chinese tires. These low cost tires that Chinese firms, along with the two remaining U.S. firms that also import these tires into the U.S., have, because of union complaints that they were costing American jobs, are the latest to have 35% tariffs placed on them last Friday night. These tariffs promise to last three years. Taking the brunt of the tariffs — U.S. chicken farmers and suppliers of auto parts, which China promises to place import restrictions on.

Not only are farmers and auto parts suppliers likely to be affected, but also millions of lower income Americans who cannot afford the $200+ tires U.S. companies produce. And all of this because the Democrat administration wants to keep its union supporters with the U.S. Steelworkers in line with its health care initiative.

Is President Obama too young to have read about the ill effects on the global economy that the Smoot-
Hawley tariffs had in 1930? That effected some 20,000 items? If the answer to the question is “yes”, perhaps he can remember more recently in 2002, the ill-fated steel tariffs former President Bush instituted, primarily as a sop to the United Steelworker’s Union?

Is crass political pandering continuing to be a part of the political landscape? (And remember, this was one of the pledges that then-senator Obama made to stop prior to his election.) Unfortunately, the answer to all these questions appear to be true.

When President Obama was quoted as saying, “I always believe that ultimately, if people are paying attention, then we get good government and good leadership. And when we get lazy, as a democracy and civically start taking shortcuts, then it results in bad government and politics.” Apparently, the current administration has begun to get lazy and take the shortcut its union donors want it to.

The conservative leaning Cato Institute has this to say about free trade: “The historical record is very clear that free trade bestows many benefits to the average person. Those countries that lower trade barriers and open their markets enjoy higher economic standards of living. Consumers have access to a wider range of higher quality products at prices lower than they would otherwise pay. The average person also benefits in terms of wages and job opportunities. When labor and capital flow freely to the most productive areas of the economy, workers are employed in better, higher quality jobs with higher wages. While there are inevitable short-term transition costs in some sectors of the economy, the long-term benefits of free trade for all far outweigh such costs.”

On the other hand, paraphrasing Edward Gresser, a liberal scholar on trade, most liberals tend to believe in trade policies that keep barriers high on goods made by poor people abroad and consumed by poor people here at home.

The trouble with such policies on products such as tires — to whom do they turn when U.S. tires become unaffordable? I guess they can always turn to retreads. On the other hand, this editor is tired of constantly dodging tire carcasses every summer while doing 70 mph down the highway.

Trade wars do nothing but harm everyone, with the exception of the favored group, in both the country either tariffs are being used against, or in the country implementing them.

Until politicians begin to understand that the “Golden Rule” applies in trade, “Do Unto Others As You Would Have Them Do Unto You,” they will continue to make the same mistakes as they have proved they have made in the past.