Another decision by president Obama that fails to send a concrete message about his intentions. The latest, apparently protectionist, move by the president is to levy a 35% tarriff on Chinese tire imports. Although it seems like a step towards a definite direction in keeping jobs at home,  questions still remain unanswered. As always, free-market drums like the Economist absolutely lambast the president for his latest move fearing that this could send America and it’s consumers to the stone age.

A valid concern, because of which the message isn’t clear, is that this kind of a tariff doesn’t prevent agents importing from other cheap avenues like Brazil and India. So, one wonders whether this is just a gimmick to pacify the unions before the major health care reform could be passed peacefully.

Whether import duties and regulation is the solution for saving jobs at all. But if not, what is the solution? The problem isn’t about the quality of the imports being higher, but the costs being lower, and this not necessarily because of efficient processes (although that might be the case) but mainly because of lower employee wages. American workers, for a multitude of reasons (cost of living in the US, worker bee culture in China, etc) have to be paid higher wages than their Chinese counterparts. Similarly, an American consumer can afford to pay a price much higher than a Chinese consumer. How is the economy, as the free-marketeers propose, truly global unless consumers are measured against the same scale?

Critics also complaint that the consumer will be the most hit if the president continues in this direction. I feel, behind this facade of “the consumer must win” are the corporates who make a much higher cut in imported products; cheaper the import, higher the cut. Since globalization happened to people, when exactly did prices actually go down? I wonder if the corporations will take a small hit on their profits, considering their beloved customers are suffering.

Again, there are the others which confound the issue further:

The president of United Steelworkers International, Leo W. Gerard, applauded Mr. Obama’s decision, saying, “The president sent the message that we expect others to live by the rules, just as we do.”

[praising the loophole that the president exploited, ignoring the possibility of a strategy]

Senator Sherrod Brown, an Ohio Democrat said in a statement, “If American workers and manufacturers are going to compete in the global market, they need to have a government that uses trade enforcement tools.”

[I don't see how this propels steel manufacturing in America to compete in the global market. Cheaper products at the same quality might continue to be produced elsewhere, and how this tariff helps in the above stated purpose is beyond me ... ]

It’ll be interesting to see to what extent China takes their antagonism regarding this move by the president, especially with a G20 conference coming up late this month…