The Wall Street Journal Attacks Tire Tariffs
The Wall Street Journal, in a Tuesday Editorial, does what it does best: advocate right-wing policies based on deregulation, lower taxes and, of course, profits over people.
Assailing a 35 percent tariff on Chinese tire imports as “Obama’s tire tax,” the paper claims that the countervailing duties have resulted in steep job loss.
“Several centuries’ worth of economic wisdom on the benefits of free trade shows that blocking imports won’t boost exports. But don’t take our word for it. Mr. Obama is proving the point himself. Consider how one of his earlier efforts at trade enforcement, the 35% tariff he slapped on Chinese tires last September, has worked out,” the editorial reads.
The paper goes on to claim that the tariff has resulted in a 10 percent drop in the U.S. tire manufacturing industry and has raised the price on low-end tires some 20 percent for consumers.
But, as Public Citizen’s Eyes on Trade points out, The Wall Street Journal is conveniently cherry-picking the numbers that support its ideological position. In fact, according to the Bureau of Labor Statistics, employment in the tire manufacturing sector has actually stabilized, and possibly even increased, since the tariffs were imposed.
There were 50,300 workers employed in the American tire manufacturing sector in June 2010. In contrast, just 49,100 workers had jobs in tire manufacturing in August 2009, one month prior to the tariff being imposed.
Given that the numbers are not seasonally adjusted, it is possible that some jobs were lost. Hardly 10 percent, however. What the numbers do prove, though, is the fact that, at the very least, the tariffs stabilized employment in the sector.
Furthermore, the paper goes on to portray the tariffs as solely the creation of a president hell-bent on raising taxes and imposing burdensome regulations on American businesses, when in fact the U.S. International Trade Commission recommended that the president take even more drastic actions. They suggested that the president impose tariffs totaling 55 percent in the initial year, 45 percent in the second year and 35 percent in the final year.
The Wall Street Journal also goes out of its way to avoid mentioning why the tariffs were imposed in the first place.
The tariffs stem from a USW complaint that alleged that China, through currency manipulation, illegal subsidies and other illegal trade practices, has damaged the domestic tire industry by dumping vast amounts of low-priced tires into the American market.
According to the USW, from 2004 to 2008, Chinese tire imports increased 215 percent by volume and 295 percent by value. Over that same time, domestic production has fallen 25 percent.
By 2008, Chinese tire manufacturers imported 46 million tires worth approximately $1.7 billion.
That deluge of cheap Chinese imported tires has resulted in the loss of at least 5,100 jobs in the industry since 2004. In addition, the USW claims that another 3,000 industry jobs are set to be lost by the year’s end as three plants shutter because they cannot keep up with Chinese competitors.
“There are two essential parts to an effective trade policy in this era of globalization: it is necessary to expand trade; it is also necessary to create and implement rules that govern that expansion. Enforcement of those rules is the opposite of protectionism – and indeed is a weapon against it,” Rep. Sander Levin (D-MI) says on his website.















