Tariff on Chinese Tires

Sounds like a good idea, right? I mean you put a tax on tires imported from China so Americans will buy American tires, what could be wrong with that?.......Let's take a closer look.

First and foremost, this was a political decision. President Obama is losing support amongst his widespread union backers and imposed these tariffs to make the United Steelworkers Union happy. You can even see this in a New York Times article on the issue. Here's the quote, "Mr. Obama cannot afford to jeopardize his relationship with major unions as he pushes Congress to overhaul the nation’s health care system." Here's the link: New York Times . Pres. Obama wants and needs the unions to continue to support him to get his agenda passed through Congress.

Besides the fact that the imposed tariff was a political decision, it is also a bad idea because it's going to make American consumers pay a higher price for tires. Think about it....why would the President want to impose a duty on Chinese tires? Too many people are buying the Chinese tires because they're cheaper, then, the union gets upset. They plea with the Obama administration who appease them by imposing a duty. Now, consumers must go to the tire store and buy expensive American tires or very expensive Chinese tires. In the end, American consumers will be hurt by the tariff.

In conjunction with the rise of tire prices, the Obama administration is teetering on agitating the Chinese, who happen to control the majority of the American debt. Even the NY Times agrees when they write, "But China is certain to be antagonized by the decision." If they understand the serious implications of this tariff, our president should have enough tact to realize the significance of such a decision. If Mr. Obama continues to enforce such tariffs, the American economy is going to suffer more. Protective tariffs are bad for economies. In most cases, the opposing country will impose retaliatory tariffs that would really hamper the country's trade. If we stop buying Chinese tires, maybe they'll impose a tariff to make our goods too expensive so they stop buying our goods. American companies that trade overseas will be hurt.

Tariffs on imports are not going to help our economy. Stay away from protective tariffs. The last thing we need is a replay of 1930 and the Hawley-Smoot Act. If you're not up on your early 20th century history, this act, a protective tariff, was an integral reason for the continuation of the Great Depression. Basically, the stock market crashed and most people were suffering, especially businesses. So, President Hoover passed the Hawley-Smoot Act which was the highest protective tariff in our country's history. In response, every other country followed suit by passing protective tariffs and the American manufacturing businesses failed.

To recap:
1) pure politics
2) bad for American consumers and the economy
3) ticking off the Chinese
What does that add up to?
BAD IDEA