Randomly Noted

The Obama administration’s decision to slap fat tariffs on Chinese tire imports by invoking what amounts to a trade-relations loophole (known as a “safeguard” provision) is a political mistake and poor policy that undermines our trade clout with China. The U.S. president has scored short-term points with labor interests, but the country can’t afford this in the long-term. It’s disappointing to see the U.S. Trade Representative’s office fumble in such a way, given its officials’ hitherto disciplined – and productive – stands on U.S.-China trade matters. In the past few years the USTR has taken tough, measured positions with regard to Beijing’s efforts to skirt World Trade Organization rules – and by and large the U.S. has prevailed via conventional WTO processes. I’m thinking principally of the conflicts over video pirating, and also foreign financial information. It’s telling that the American tire industry didn’t push for the new tariffs; companies that make tires in plants scattered across the globe are continually on the hunt for the lowest labor, material and shipping costs – precisely so they can sell a full range of cheap-to-upscale tires abroad – and, yes, at home to penny-pinching U.S. consumers. It’s just so obvious: globalization is here to stay; we’d better get used to it and stop pandering to labor unions and niche businesses (textiles, garlic growers, bee keepers facing Chinese competition) which, frankly, have to adapt or die. All this said, China is an utterly unreliable trade partner and the U.S., with Europe, mustn’t hesitate to use WTO and other forums to keep it in line. If only the U.S. government had done so in the tires case.