United Liberty

Last week, Carpe Diem wrote last week about consumers paying $2.5 billion in tariffs on imported sugar, which is part of the cost of protectionist policies.

CNBC recently had a free trader and someone from a special interest group to discuss the issue. Take notice how the guy representing farm interest immediately ties getting rid of these tariffs to importing oil and getting rid of the US sugar industry. He just doesn’t believe in competition:

H/T: Club for Growth

The Obama Administration is once again proving its protectionist tendencies by slapping tariffs on another Chinese made good:

The United States has firmed up plans to impose up to 15 percent tariffs on imported Chinese steel pipes targeted for wideranging sanctions for alleged unfair subsidies.

The Commerce Department said Tuesday it made a “final determination” to impose tariffs of between 10.36 percent and 15.78 percent following a probe on imports from China of “oil country tubular goods.”

They are steel pipes used to deliver oil and gas in the petroleum industry.

We probably shouldn’t be surprised at what prompted thus:

The department pursued an investigation into the case after complaints from various US industry groups and unions, including the United States Steel Corporation, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.

The end result of tariffs are high prices for Americans consumers. The worst thing the Obama Administration can do is start a trade war with any country, let alone China. Unfortunately, that is what they seem hell bent on doing.

H/T: Club for Growth

The United States may take more protectionist measures:

The United Steelworkers union, fresh from persuading President Barack Obama to restrict tire imports from China, filed a new case Wednesday asking for duties on coated paper from both China and Indonesia.
[…]
The steelworkers union, which represents workers in a number of industries, sees itself in a battle against what it believes are unfair foreign trade practices that have led to the loss of millions of U.S. manufacturing jobs.

They are joined in their latest trade case by paper manufacturers NewPage Corp of Miamisburg, Ohio; Appleton Coated LLC of Kimberly, Wisconsin; and Sappi Fine Paper North America of Boston, Massachusetts, which together employ about 6,000 union workers at paper mills in nine states.

The article points out that unlike the tire tariff, this will be investigated by the Department of Commerce with approval or rejection coming from the U.S. International Trade Commission.

If another new tariff is imposed, expect retaliation. This of course will only hurt consumers.

Barack Obama seems to be on the verge of committing one of the gravest mistakes of the 31st President of the United States:

President Obama traveled to Wall Street yesterday to press his case for more financial regulation, but the bigger economic issue of the day concerned other White House policies. To wit, what does it mean for the world economy if America now has its first protectionist President since Herbert Hoover?

The smell of trade war is suddenly in the air. Mr. Obama slapped a 35% tariff on Chinese tires Friday night, and China responded on the weekend by threatening to retaliate against U.S. chickens and auto parts. That followed French President Nicolas Sarkozy’s demand on Thursday that Europe impose a carbon tariff on imports from countries that don’t follow its cap-and-trade diktats. “We need to impose a carbon tax at [Europe’s] border. I will lead that battle,” he said.

Mr. Sarkozy was following U.S. Energy Secretary Steven Chu, who has endorsed a carbon tax on imports, and the U.S. House of Representatives, which passed a carbon tariff as part of its cap-and-tax bill. This in turn followed the “Buy American” provisions of the stimulus, which has incensed much of Canada; Congress’s bill to ban Mexican trucks from U.S. roads in direct violation of Nafta, prompting Mexico to retaliate against U.S. farm and kitchen goods; and the must-make-cars-in-America provisions of the auto bailouts. Meanwhile, U.S. trade pacts with Colombia, Panama and South Korea languish in Congress.

Investors don’t like trade wars, and they’re giving a thumbs down to President Obama’s decision to impose a protective tariff on Chinese-made tires:

Fears of a trade dispute between China and the United States over tariffs on tires pushed markets lower in Asia and Europe on Monday, with Wall Street exchanges expected to follow.

The DAX in Frankfurt fell 0.8 percent and the FTSE 100 in London lost 0.64 percent. The CAC-40 in Paris shed 0.9 percent. All three major European exchanges were off their lows of the day. Asian indexes lost as much as 2 percent and Wall Street was expected to fall later. Futures indexes on Wall Street were also lower.

Washington’s decision to impose trade penalties on Chinese tires infuriated Beijing, which condemned the move as protectionist and said it violated global trade rules.

Crucially, the dispute suggests international economic cooperation is weak ahead of the G-20 meeting of rich and developing nations later this month in Pittsburgh. With American-Chinese trade a key link in the global economy, investors were spooked by the potential repercussions.

Indeed.

More restrictive trade policies could be the one thing that turns an economic recovery into a double-dip recession.

Nice job, Mr. President.

Hundreds of years of economic theory notwithstanding, the United States takes another step toward protectionism by forcing Chinese tire makers to pay a 35 percent tariff on their imported product. As trade expert Dan Ikenson says, “Short of armed hostilities or political subversion, no state action is more provocative than banning another’s products from entering your market.”

It’s a shame to see a president who spends so much time talking about caring for the poor, forcefully rise the price of a common product for all Americans just for the sake of paying back a few special interests that have donated heavily to his campaign efforts.

Free traders had very high hopes for the new president when it came to reducing protectionism, but despite his rhetoric, Obama’s actions are dreadfully dissapointing.