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More Taxes on the Poor: Obama Approves a Tire Tariff

Anthony Randazzo
September 12, 2009, 9:49am

As I reported on earlier this month, a trade dispute has opened with China over tires. Now President Obama has decided to weigh in.

The rub, if you will, is that the increased presence of Chinese tire companies in America is impacting the American rubber market. The United Steelworkers union, as a representative for the rubber workers union, wants Congress to use its authority to pass tariffs on Chinese rubber imports to make them more expensive in the U.S. marketplace. But why would the President want to make rubber, and thus rubber products like tires, more expensive for Americans? On Sept. 2, I wrote:

If Americans can buy cheaper tires from a Chinese manufacturer, that are just as good if not better quality than an American manufacturer, then why would we want to charge Americans more? What seems like the real unamerican thing to do is make it more expensive for Americans to buy things. There is nothing ambiguous about that.

Of course, this is all about jobs. Even if it does mean higher priced products on the market. Today, The Washington Post writes:

In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires imported from China, a move that risks angering the nation's second-largest trading partner. The decision is intended to bolster the ailing U.S. tire industry, in which 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 and 25 percent the third.

So the president raises the cost of tires with a tariff, a tax. Guess who buys tires? It's not just the rich, not just those making more than $250,000 a year. It's everyone. So everyone that owns or leases a car is ultimately going to be impacted. Just another way in which the president has broken his promise not to raise taxes on the lower and middle classes.


Anthony Randazzo is Director of Economic Research


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