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Saturday, September 12, 2009

Obama Blows Tire Decision

Like President Bush before him, President Obama had the opportunity to stand up for the free exchange of goods between American citizens and the rest of the world, and failed. The Washington Post reports on the Obama Administration's decision to slap tariffs on imported tires simply to protect American firms that wish to charge higher prices.
The decision is intended to bolster the ailing U.S. tire industry, where more than 5,000 jobs have been lost over the past five years, as the volume of Chinese tires in the market has tripled.

But it threatens to upset the strategically important relationship between the United States and China and comes on the eve of the Group of 20 summit in Pittsburgh, where world leaders are expected to discuss cooperation on trade issues.

The tariff will amount to 35 percent the first year, 30 percent the second year and 25 percent the third year.
Protectionism does nothing to protect the American economy. It protects ineffecient firms by allowing them to pass along higher prices to consumers. The tariffs were imposed under a 2000 law approved by the Republican-controlled Congress and President Clinton. President Obama's ill-conceived decision to use these tariffs will impose a large cost on American consumers in order to deliver a much smaller benefit to a politically-connected industry sure to be thankful for their handout. There is plenty of political cowardice all around.

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