Free Tread

Derek Scissors / September 12, 2009

President Obama has decided to apply heavy tariffs to passenger car and light truck replacement tires made in China. This is the latest and worst episode in an ill-advised assault on free trade with the PRC.

Taking WTO-compliant steps to counter Chinese subsidies or other mercantilist behavior is entirely reasonable. (That doesn’t mean any WTO-compliant action is a good idea — the “Buy America” provisions passed as part of the stimulus package may be WTO-compliant but are still terrible policy.) The problem here is that American actions are occurring in a policy vacuum. Our actions appear to be driven by domestic politics, a dangerous development given the importance and complexity of our trade with China. (more…)