A Closer Look at the Tariff

The BBFiles has generally supported the Obama Administration's economic policies. However, Obama has given into union demands and passed a terrible tax on rubber imports, and we cannot support this mistake. Even though Bush rejected the United Steelworkers tariff request four times, Obama gave in to this bad economic policy right away.

The tariff imposes a 35% tax on all rubber imports from China. This hurts the Chinese and American citizens in several ways. First, it means that the USA can sell lower quality rubber and be 35% less competitive in the rubber industry. Second, it hurts American companies that sell low-end rubber tires. This is basically every retail tire store. Next, it puts Chinese companies out of business. Remember, these are companies that SPECIALIZE in rubber manufacturing and can achieve high quality tires for low prices.

Essentially, the 35% tariff is a hand-out to uncompetitive American companies.

Bloomberg reports this about the nation's largest union, the AFL-CIO:

AFL-CIO Reaction
AFL-CIO President John Sweeney applauded the decision in a statement today, saying it “sends a strong message that the U.S. government will take the necessary action to ensure that American workers and producers can compete on fair terms in the global economy.”

Bloomberg says this about how American companies voted, this is interesting because if the tariff supposedly helped American companies, all US companies would approve. But Bloomberg reports:

Goodyear Tire & Rubber Co., the largest U.S. tiremaker, stayed neutral. Cooper Tire & Rubber Co., the second-largest U.S. tiremaker, opposed the relief. Imposing tariffs will have “highly damaging ripple effects throughout the U.S. economy by increasing the cost of imported tires that largely comprise the low-end of the tire market,” the Emergency Committee for American Trade, which represents those companies, wrote in a letter to Obama last month.