BrianGarst.com

Following President Obama’s launching of (trade) war against China, the world’s most populous nation and our second biggest trading partner, they have predictably struck back.  Predictably, that is, unless you work at the New York Times:

China unexpectedly increased pressure Sunday on the United States in a widening trade dispute, taking the first steps toward imposing tariffs on American exports of automotive products and chicken meat in retaliation for President Obama’s decision late Friday to levy tariffs on tires from China.

How utterly unexpected of them. I mean, who could have possibly predicted that slapping tariffs on Chinese tires simply because Americans wanted to purchase, and thus were sold, a high number of them would be just the first shot in a new trade war?

The article also provides the usual misinformed scaremongering about the so-called trade deficit:

Mr. Obama’s decision to impose a tariff of up to 35 percent on Chinese tires is a signal that he plans to deliver on his promise to labor unions that he would more strictly enforce trade laws, especially against China, which has become the world’s factory while the United States has lost millions of manufacturing jobs. The trade deficit with China was a record $268 billion in 2008.

The implications couldn’t be clearer, nor more wrong. There’s little evidence that China’s increases in manufacturer have come out the expense of American jobs. While the American manufacturing sector has indeed lost jobs, it has been doing so at the same, steady pace for over 50 years – well before China was a player. America manufactures more today then ever before, but thanks to gains in productivity it also requires less labor to do so.

The bit about the trade deficit is clearly tacked on as an ominous indication of the Chinese economic threat, and thus a justification for “more strictly enforc[ing] trade laws.” Later the article notes, “the United States buys $4.46 worth of Chinese goods for every $1 worth of American goods sold to China.” Good for us that we get $4.46 worth of goods for every $1 worth we give up! Don Boudreax at Cafe Hayek recently explained by example the idea that exports are the costs, while imports are the benefits.

He also made the point that retaliation is self-defeating. Unfortunately, the tire tariff is likely to spur pressure from other domestic special interests who don’t want to compete in a free market, and the Chinese retaliation gives them further political cover.  Let’s hope President Obama comes to his senses soon and stops this cycle or we’re in for a world of hurt.

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