There are No Victors in Trade Wars

Today the World Trade Organization issued a decision confirming that the United States did not break any of its obligations with China over the tariffs imposed on Chinese tire imports earlier last year.

Ambassador Ron Kirk of the United States Mercantilist Trade Representative, commented:

This is a major victory for the United States and particularly for American workers and businesses. We have said all along that our imposition of duties on Chinese tires was fully consistent with our WTO obligations.

This might be a victory in that it is one of the few times that the United States was not laughed out of the WTO, but that’s where the victory ends. Imposing tariffs that lead to trade wars, re-organization of supply-chains,  business uncertainty, and rising consumer prices is a victory for no one.

What happened as a result of the tire tariffs?

Tire prices rose, imports from other Asian countries increased, China retaliated by slapping tariffs on steel, chemicals, and poultry. Was one specific industry maintain higher employment? Quite likely, at the expense of taxpayers and jobs in other industries with less political clout — while doing much to delay real progress on liberalizing trade in the United States.

Another quote from Kirk, one year ago:

“These remedies are a necessary response to the harm done to U.S. workers and businesses, designed to achieve the objective of curbing what the ITC determined was a harmful surge of Chinese tires into the U.S. market,” said Kirk. “China is America’s second largest trading partner, and the health and strength of our relationship are very important to both countries. We consulted with China as allowed for under the WTO. This decision has been based carefully on America’s rights under WTO rules, namely China’s accession agreement, and on sound economic calculations.”

These are the people who are running our government. Making sound economic calculations to determine the proper amount of tires to be imported into the United States by China, that are in absolutely no way based upon a interest group’s political influence.