Obama punishes Chinese success at the expense of U.S. consumers

Obama has decided to impose a 35% tariff on Chinese-made tires, invoking a 2000 law that allows the imposition of tariffs on any surge in Chinese imports that damages a U.S. industry. We're not talking tariffs to remedy an allegation of dumping, we're talking about tariffs on products that prove so successful that they "harm" domestic producers. Now, not only will Chinese producers find it harder to sell their products here, but U.S. consumers will find that tires are unnecessarily expensive. The real problem with this, however, is that it could be the first in a series of tariffs that could escalate into a trade war, and that would be very damaging indeed. One need only recall the Smoot-Hawley tariffs that were one of the principal causes of the Depression.

The real losers in any tariff war are the countries that impose tariffs, since they deprive themselves of cheap goods. It's akin to cutting off your nose to spite your face. Bush was stupid to impose tariffs on steel in his first term, and now we see the same stupidity reemerging with Obama. We can only hope this is an isolated incident.

UPDATE: The NY Times reports that Obama's decision was a response to a complaint by the United Steelworkers union. Tire retailers opposed the decision. HT: Mark Perry