If President Obama backs the tariff, he risks upsetting the Chinese at a time when the United States needs China to keep buying US government debt to fund stimulus efforts.
Chinese tire makers and supplies have found allies in US tire distributors and retailers who say tariffs would raise prices, hurting cash-strapped consumers. The consuming Industries Trade Action Coalition, a group representing manufacturers and distributors, has also objected to the proposed tariff. It fears that if Obama supports tariffs on Chinese tires, it could set off an avalanche of Section 421 filings that would lead to trade wars and harm global trade.
Which option is more significant for US-China economic relations? The person with clout will have to decide soon. The Law of Comparative Advantage for bi-lateral trade should be known to all thinkers and protectionism would lead to retaliation causing global serious depression. The worst scenario would be the destructive consequences for peoples in both nations. I have reason to believe that the leader would have the wisdom to make a good decision.
The issue of issues should be the interest of American consumers who would prefer to pay lower prices to save money during the recession with high rate of unemployment under the reality of global economic downturn.
Francis Shieh a.k.a. Xie Shihao, a consumer in the USA who would have empathy toward other consumers in the United States on Friday,August 7, 2009 at 10 a.m.
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