Fueled by complaints from the United Steelworkers union and a thirst to protect American industry, President Barack Obama’s spirited move to impose tariffs on tires imported from China might lead the United States to tread on rougher grounds.
The imposed tariff on all car and light truck tires which increases the current 4 percent rate an additional 35 percent in the first year, 30 percent the next and 25 percent the third year for Chinese manufactured tires coming into the U.S. is seen as a triumph over the manufacturing giant by the United Steelworkers union who filed the complaint attributing to the lost of many American jobs.
The tariff which was met with opposition from China might prove unfavorable for the United States considering the small demographic of American workers it affects, but the probable blow it can induce on American economy as a whole.
Potential effects of trade barriers such as this can range anywhere from other American unions chasing for government assistance to combat the results of outsourcing, to more worldly matters, such as a full-on trade war between the United States and China and/or other countries with substantial economic leverage.
Nonetheless, experts are also foreseeing a shift of tire manufacturers to other low-cost industries like Mexico and Brazil prompting the implication of more trade-agreements to with countries.
China’s entry into the World Trade Organization further engages matters as it could now file a dispute against the United States-similar to how the European Union met former U.S. president George W. Bush’s steel tariffs, resulting in the early-termination of the implemented fees.
As with any worldly issue, a compromise will be set and hopefully be accepted with open arms. The enterprise to free trade costs money, but ultimately a market run primarily by supply and demand will benefit both consumers and producers more than one where both are subjected to economic barriers and safeguards from the government.