As if flooding the economy with cash and multiplying the national debt in a period of months weren’t inflationary enough, now we’re going into protectionism.
You probably haven’t heard much about Section 421, but it is protectionism, pure and simple. The Wall Street Journal explains,
A Protectionist Wave
Obama invites a rush of similar claims with his tariffs on Chinese tires.
The White House leaked word late Friday evening that the U.S. will impose a 35% tariff on imported Chinese tires used by millions of low-income Americans. We wonder if President Obama understands the political forces he’s unleashing with this blatant protectionism.
Mr. Obama is setting a precedent in the tire case because he is applying a previously unused part of the trade law known as Section 421. This allows U.S. industries or unions to seek protection from “surges” of Chinese imports, with a lower burden of proof than normal antidumping or countervailing duty cases. President Bush nixed the four Section 421 petitions that reached his desk, citing the national economic interest. Domestic lobbies had lobbied Mr. Obama hard to reverse that pattern and set a new protectionist precedent.
Ah, the lobbyists. Where would we be without them? Well, take a look at the items that will getting more expensive soon: everything from TVs to garlic,
Then there are companies that face competition from lower-cost Chinese imports and want to push their antitrade agenda forward. Take the Committee to Support U.S. Trade Laws, which lobbed a pro-tariff letter into the White House this month. The umbrella group includes the American Furniture Manufacturers Committee for Legal Trade; the California Fresh Garlic Producers Association; the U.S. Beekeepers; the Florida Fruit & Vegetable Association; and the Flower Growers of Puget Sound. “This case is being watched closely to see whether Section 421 is an effective law or a dead issue,”committee executive director David A. Hartquist wrote to Mr. Obama.
This threat will now be realized as other industries pursue the 421 solution to reducing competition. Some of the product categories that have seen import surges include shoes, lawn mowers, television monitors, hearing aids, musical instruments like keyboards and guitars, women’s underwear, blouses and t-shirts, according to Greg Rushford, editor of a newsletter on trade policy. Oh, and trousers, women’s knit shirts and bras, according to Cass Johnson, president of the National Council of Textile Organizations—another lobby that must be gleeful that Mr. Obama has unleashed Section 421.
And let’s not forget the unions:
As a candidate, Mr. Obama courted union support, and the United Steelworkers filed the tire case anticipating he would pay them back.
The payback: U.S. to Impose Tariff on Tires From China. Didn’t take long at all, did it?
China’s not exactly sitting still over this.
Considering the Obama adminstration’s ruinous financial policies, expect more, much more of that to come.