Posted by: rotenochsen | September 15, 2009


Tuesday, September 15, 2009


The Cato institute has reported that President Obama has imposed a tariff on Chinese made tires of 35%. This after he encouraged the G-20 members at their last meeting to not do anything to inhibit free trade!
One of the more interesting spectacles in all of this,would be watching President Obama explain his decision to impose tire duties on China at the G-20 meeting he is hosting in Pittsburgh in 12 days. Recall the president’s pledge (along with the other G-20 leaders) at the last G-20 meeting in London to avoid new protectionist measures.Source:Cato Institute

President Obama’s decision to impose a 35 percent tariff on imported tires from China was not an act of statesmanship. The White House admitted as much by announcing its decision at 10 p.m. on Friday evening in order to minimize news coverage.

A few union leaders are cheering, but in just about every other way our country is worse off. Among the biggest losers will be low-income American families. The tariffs apply to lower-end tires that sell for $50 or $60 each, compared to $200 for higher-end tires. As The Wall Street Journal reported this morning:

The low end of the market will feel the impact of the tariff most, as U.S. manufacturers, who joined the Chinese in opposing the tariffs, have said it isn’t profitable to produce inexpensive tires in domestic plants.Because Union wages and contributions to Union benefits make tire producers unable to produce cheap tires and still make a profit.

“I think within the next 60 days you’ll see some pretty significant price increases,” said Jim Mayfield, president of Del-Nat Tire Corp. of Memphis, Tenn., a large importer and distributor of Chinese tires. He estimates prices for “entry-level” tires could increase 20% to 30%.This will impact the lower middle class worker and the entry level wage earner whom Obama pledged to defend against big Business when he campaigned for the Presidency.

With his decision Friday, President Obama has revealed himself to be a friend of the status quo.He has already signaled that he would be a partner with the Unions before he was elected and with the Chrysler and General Motors debacle.

While he is doing the bidding of Unions, Obama is planning to stick it to the middle class. Those whom he promised during his campaign not to increase their taxes to pay for his welfare state programs.
Obama is raising taxes on households at the top while providing refundable giveaways to households at the bottom, such as the Making Work Pay tax credit and expansions in the child and earned income tax credits. But the top fifth of households already pay an effective federal tax rate of 26 percent, while the bottom fifth pay just 4 percent, on average. The tax code is already far too graduated, and Obama is exacerbating this inequity.
And remember he promised not to raise taxes on families with incomes of less than $250,000. But the president already broke that promise with a cigarette tax increase in February, and his cap-and-trade energy plan is effectively a large tax increase on all families. Health care reform might also include a significant tax increase on average families. Thus, it wouldn’t be surprising if the Obama tax task force also decided to raise taxes on the middle class.

What has this to do with tariffs on Chinese tire imports. Well, if we do not want to get into a trade war because as surely as night follows day there will be more union requests for tariffs on other products that are made in Country’s that do not have punitive regulations or high union wages to make products that are exported to the USA.
The Obama administration should rethink its devotion to tax increases as the solution to seemingly every policy issue. Tax increases make no sense in the competitive global economy, and they imply that there are no savings left to be made on the spending side of the federal budget.This is the thinking of the tax and spend Liberals to control the Congress and the White House for now, and that is why over one half million protesters gathered in Washington to send a message to Congress to stop the spending!!


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