Day By Day

Monday, September 14, 2009

Obama Stupidly Starts Trade War

So in the midst of an economic crisis Obama decides to start a trade war with China. This is explainable only as a pay-off to the unions, but it is incredibly stupid and dangerous.

A full-blown trade row erupted between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles.

Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.

In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.

Read about it here.

What makes it doubly stupid is the fact that the four largest producers of tires in China are American-owned companies.


Daniel Drezner explains just why this particular action by Obama is so damn dangerous and stupid. [here]