# Get Ready to Pay More for Your Tires **URL:** \ **Category:** Great Debates\ **Created:** [September 12, 2009, 10:02pm UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852 "2009-09-12T22:02:37Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![wierdaaron](https://avatars.discourse-cdn.com/v4/letter/w/eada6e/32.png) [@wierdaaron](https://boards.straightdope.com/u/wierdaaron)\ **Post date:** [September 13, 2009, 12:45am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/21 "2009-09-13T00:45:35Z")
> [@Martin\_Hyde](#): > > If you think being told that you are wrong is an “insult” then you aren’t someone who is capable of debate. If you look over my post you will note the only manner in which I referenced you personally was to say that you were _wrong_. Is there a difference between “You are attractive” and “You are so fully attractive it is virtually indescribable how attractive you are”? Maybe you have one of those hyperbole-filtering computer monitors. At any rate, shouldn’t this thread be called “Get Ready to Pay More for Chinese Tires”? ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [September 13, 2009, 12:52am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/22 "2009-09-13T00:52:03Z")
> [@wierdaaron](#): > > At any rate, shouldn’t this thread be called “Get Ready to Pay More for Chinese Tires”? All tires will be more expensive. Demand increases with the increase in cost of a substitute good (i.e. more expensive Chinese tires will cause more people to look domestic). The increase in demand for domestic tires will drive up prices for domestic tires. Markets are interrelated because people make their choices based on all the options available to them. If you make one of those choices more expensive, then you also end up making other related choices more expensive. Just the way it works. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 13, 2009, 12:55am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/23 "2009-09-13T00:55:56Z")
> [@Martin Hyde](#): > > However even with that fundamental truism I still am not aware of any modern economist who has put forth any meaningful support for the idea that a protective tariff is ever a good idea. I suppose it depends on how you define “meaningful support”, but certainly there are plenty of modern economists who have presented arguments in favor of specific types of protective tariffs in specific circumstances: Ha-Joon Chang, Herman Daly, and Paul Krugman, just to name a few. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 13, 2009, 1:06am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/24 "2009-09-13T01:06:45Z")
I suppose protectionism as practiced by our trading partners is good. But ours is bad. They all protect pet industries. We don’t because we love to use their cheap labor. Our corporations want to ignore America and make money everywhere. But our people are suffering from it. If other countries followed the same concept it would be somewhat defensible. They do not. If they want to follow the original concepts offered when we made the agreements ,we could discuss it. But they were able to escape environmental and wage constraints. Our business lobbyists saw to it that when the final negotiations were done, the rules were out. Free trade is a made up term for a one sided trade deal to allow cheap labor and freedom from regulation while allowing other countries to be protectionist about their own select industries. ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [September 13, 2009, 1:08am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/25 "2009-09-13T01:08:17Z")
> [@Kimstu](#): > > I suppose it depends on how you define “meaningful support”, but certainly there are plenty of modern economists who have presented arguments in favor of specific types of protective tariffs in specific circumstances: Ha-Joon Chang, Herman Daly, and Paul Krugman, just to name a few. I’d be interested in a cite about Krugman. [One of his recent blog posts](http://krugman.blogs.nytimes.com/2009/09/11/fetishizing-free-trade/) is about justified border tariffs, but not for protectionism. The two rationales given are 1) fairly levying a domestic consumption tax, and 2) compensating for the externality from the production of foreign goods. These two reasons are far different from an attempt to protect domestic industry, which I can’t recall ever having seen from him. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 13, 2009, 1:20am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/26 "2009-09-13T01:20:17Z")
> [@Hellestal](#): > > I’d be interested in a cite about Krugman. One of his recent blog posts is about justified border tariffs, but not for protectionism. The two rationales given are 1) fairly levying a domestic consumption tax, and 2) compensating for the externality from the production of foreign goods. OK, but several (critical) responses I’ve seen to that essay of Krugman’s call his reaction “protectionist”, which is why I included his name in the list. Is there in fact a universally agreed-on bright line between tariff advocacy for protectionist reasons and tariff advocacy for non-protectionist reasons? If it is non-protectionist to advocate a tariff for the purpose of compensating for an externality from the production of foreign goods, I imagine a non-protectionist argument could be crafted in support of the Chinese tire tariff too. Chinese manufacturing, after all, is fairly heavy on the environmental externalities. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [September 13, 2009, 1:21am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/27 "2009-09-13T01:21:23Z")
> [@Kimstu](#): > > I suppose it depends on how you define “meaningful support”, but certainly there are plenty of modern economists who have presented arguments in favor of specific types of protective tariffs in specific circumstances: Ha-Joon Chang, Herman Daly, and Paul Krugman, just to name a few. I’ll have to echo **Hellestal** I’m certainly aware of Krugman supporting tariffs but not protective tariffs. Tariffs as a policy tool obviously have different applications, it is the specific protection-of-a-local-industry application that I haven’t seen economists supporting in my lifetime (but it’s certainly possible, I by no means read all the literature.) ---
**Author:** ![Alex\_Dubinsky](https://avatars.discourse-cdn.com/v4/letter/a/dbc845/32.png) [@Alex\_Dubinsky](https://boards.straightdope.com/u/Alex_Dubinsky)\ **Post date:** [September 13, 2009, 1:24am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/28 "2009-09-13T01:24:30Z")
> [@Kimstu](#): > > Emphasis added. So, ironically, it may be that this protectionist move is intended partly to **weaken** protectionist sentiment and defuse a potential strengthening of public opposition to more wide-ranging trade liberalization policies. Ain’t politics a hoot? Wow. Btw, I think some economists have green-lighted protectionism in the case of increasing national security. Eg, you’re a country that imports all its CPUs because it’s cheaper than making your own. Worse comes to worst, you can’t import them anymore. Now you don’t have computers! However, protectionism is always very crude way of going about encouraging a domestic industry. Might be part of an answer, but it could just make the local industry lazy and _less_ capable, and hurt the country in the meantime. The other way out in this situation is subsidies (making local industry cheaper). ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [September 13, 2009, 1:27am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/29 "2009-09-13T01:27:36Z")
> [@Kimstu](#): > > If it is non-protectionist to advocate a tariff for the purpose of compensating for an externality from the production of foreign goods, I imagine a non-protectionist argument could be crafted in support of the Chinese tire tariff too. Chinese manufacturing, after all, is fairly heavy on the environmental externalities. If you were levying tariffs for non protectionist reasons I’d expect to see something mentioned about those very reasons. This tariff was imposed under an agreement that gave the U.S. permission to protect domestic industry from an influx of Chinese tires. You can certainly craft an argument for anything but this tariff is definitely exclusively protectionist and that is the legal justification for it. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [September 13, 2009, 1:28am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/30 "2009-09-13T01:28:59Z")
> [@Alex\_Dubinsky](#): > > Wow. > Btw, I think some economists have green-lighted protectionism in the case of increasing national security. Eg, you’re a country that imports all its CPUs because it’s cheaper than making your own. Worse comes to worst, you can’t import them anymore. Now you don’t have computers! However, protectionism is always very crude way of going about encouraging a domestic industry. Might be part of an answer, but most of the time it just makes the local industry lazy and _less_ capable, and hurt the country in the meantime. The other way out in this situation is subsidies (making local industry cheaper). That’s not an economic position though. Ultimately you wouldn’t need to use a tariff to protect an industry “vital to national security”, either. ---
**Author:** ![Alex\_Dubinsky](https://avatars.discourse-cdn.com/v4/letter/a/dbc845/32.png) [@Alex\_Dubinsky](https://boards.straightdope.com/u/Alex_Dubinsky)\ **Post date:** [September 13, 2009, 1:31am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/31 "2009-09-13T01:31:40Z")
Not sure what you mean, martin. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 13, 2009, 1:42am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/32 "2009-09-13T01:42:29Z")
> [@Martin Hyde](#): > > it is the specific protection-of-a-local-industry application that I haven’t seen economists supporting in my lifetime AFAICT, it is still quite current in, for instance, “infant industry” considerations, primarily those in developing nations. Of course, infant industry arguments wouldn’t be relevant in the case of America’s Chinese tire tariff, but I think it’s much too sweeping to claim that economists’ support for **any** instance of protection-of-a-local-industry tariff is as extinct as the dodo. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 13, 2009, 1:47am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/33 "2009-09-13T01:47:22Z")
[http://www.msnbc.msn.com/id/28315525/](http://www.msnbc.msn.com/id/28315525/) China has routinely violated trade agreements, copyright infringement, currency under evaluation and many others. Perhaps they are sending a message. We should be honorable and they should cheat like hell. There is nothing holy about free trade. It does not exist and never will. All countries are fighting about what they will tolerate. ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [September 13, 2009, 1:58am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/34 "2009-09-13T01:58:50Z")
I wonder what the Chinese tarrif on US made cars and auto parts is? ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 13, 2009, 2:05am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/35 "2009-09-13T02:05:55Z")
> [@Martin Hyde](#): > > You can certainly craft an argument for anything but this tariff is definitely exclusively protectionist and that is the legal justification for it. Yes, I agree. In fact, this discussion inspired me to go look up the background on this “safeguard tariff” provision from the 2000 law. Here’s how [Manufacturing and Technology News](http://www.tradereform.org/content/view/1965/52/) explained it: > [@](#): > > U.S. and global trade agreements contain features know as “safeguard” provisions. When a surge of increased imports threatens a domestic industry and its workers, any of the involved parties may petition the International Trade Commission to provide short-term import relief during which the industry can adjust. If the commission makes an affirmative determination, it recommends to the president remedies that will enable the industry to adjust. The final decision to act, however, resides with the president. > > The ITC determination does not require a finding of unfair trade practices. Rather, Section 201 of the trade laws, requires that the ITC only find the injury or threatened injury to be “serious” and increased imports to be an important cause of the existing or prospective damage to U.S. producers and workers. > > […] The period of ITC relief is limited to only four years, with the remote possibility of an extension for up to another four. It’s clear that the cited source is in favor of the tariff, but they offered an interesting description of what they claimed to be an example of its beneficial effects in the past: > [@](#): > > The experience of Harley-Davidson illustrates how useful and powerful the safeguard law can be, particularly during an economic downturn, such as now exists. In the early 1970s, Harley-Davidson dominated the large engine motorcycle market in the United States. Japanese manufacturers aggressively entered the U.S. market with deeply discounted prices and large inventories. […] The surge of imports overwhelmed the U.S. maker, and Harley filed a petition for safeguard relief at the ITC in 1982. The subsequent investigation found that the surge of Japanese imports, coupled with an additional year’s worth of inventory of Japanese machines in the U.S., virtually guaranteed that Harley would not recover without safeguard relief. > > The ITC recommended an increase in tariffs on the imports of large engine motorcycles for five years, enough time for Harley to recover. The first year the recommended tariff was 45 percent; it was 35 percent the second year, 20 percent the third year, 15 percent the fourth year, and 10 percent the fifth year. _President Reagan accepted the ITC recommendations_ [:eek: **Well, there’s Obama’s comeback to the conservatives right there! “I’m just following the wise and foresighted precedent set by Ronald Reagan!”**], and Harley got its relief. > > Harley used the time to improve its product and marketing, diversify its product line, and put its financing on a sound basis. Four years later in 1987, Harley had 47 percent of the big engine market and it was doing so well _the company requested that the U.S. lift the fifth-year tariff._ In the succeeding years, Harley met the Japanese head-on and prospered. Emphasis added. So if this information is correct, what we’re looking at here is a **temporary** protective tariff that is mandated to expire within a few years, and which has had demonstrated success in cushioning the impact of a sudden import surge and enabling American businesses to learn to compete effectively when the tariff is removed. Is that necessarily such a bad thing? Of course, as I said, this source clearly has a stake in the pro-tariff position, so we should be wary of possible spin here. But are its arguments demonstrably wrong? Can the OP or any other free-trade absolutist here offer arguments as to why I should **automatically** oppose temporary “safeguard tariffs” of this sort in **all** cases, and not just by appealing to the fundamental truism “tariffs are bad”? ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [September 13, 2009, 2:16am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/36 "2009-09-13T02:16:11Z")
> [@Sam\_Stone](#): > > The Obama administration in its infinite wisdom [has decided to slap a 35% tariff on Chinese tires.](http://www.washingtonpost.com/wp-dyn/content/article/2009/09/11/AR2009091103957_pf.html) > … > Would anyone like to defend this particular brand of idiocy? Bush does it too? [Bush imposes steel tariffs](http://www.usatoday.com/money/general/2002/03/05/bush-steel.htm) > [@](#): > > President Bush on Tuesday slapped punishing tariffs of 8% to 30% on several types of imported steel in an effort to help the ailing U.S. industry, drawing criticism from American allies and mixed reviews at home. IIRC, you weren’t too thrilled about the tariff that time either. Me? Sometimes short term punitive measures are needed. I may have even said so back in 2002, but with the search feature as it is… With luck, this latest tariff will die in a year or so, as did Bush’s: [Bush Cuts Steel Tariffs, Declares Victory](http://www.forbes.com/2003/12/05/cx_da_1205topnews.html) I bought some steel back in April, so apparently it’s still available after the tariff fiasco. I expect that in a few years tires will also be available in America. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 13, 2009, 2:20am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/37 "2009-09-13T02:20:58Z")
> [@Squink](#): > > With luck, this latest tariff will die in a year or so, as did Bush’s: Luck won’t be necessary. As I pointed out in my most recent post, this ITC-recommended “safeguard tariff” is legally mandated to be temporary, and will expire after a few years. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 13, 2009, 3:15am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/38 "2009-09-13T03:15:56Z")
Wow. The more I look into this issue, the more it appears that the OP skipped over the genuinely interesting debate aspects of it in favor of indulging in unfocused angry anti-Obama rhetoric. It turns out that these “safeguard import duties” or “safeguard tariffs” thingies are not some Obama-esque manifestation of pernicious leftism, but are all over the place in free trade agreements worldwide. Republican and Democratic presidents alike have invoked them. Do they actually serve a useful purpose? If not, what should we do about them? With these questions in mind, I propose the following revised version of the OP as a more constructive alternative to **Sam** ’s rather Glenn-Beckish “how-can-anybody-possibly-defend-this-unspeakable-bullshit” rant: **Get Ready to Pay More for Your Tires: The Troubles with “Safeguard Tariffs”** The Obama administration has just decided to [accept the International Trade Commission’s recommendation to impose a three-year tariff on imported Chinese tires,](http://www.washingtonpost.com/wp-dyn/content/article/2009/09/11/AR2009091103957_pf.html) with a peak tariff rate during the first year of 35%. This is an instance of the “safeguard tariff” provisions included in many free trade agreements, including NAFTA and China-US trade rules. “Safeguard tariffs” are temporary import duties that the President can impose if they are recommended by the International Trade Commission as a necessary measure to shield a domestic industry from the effects of a sudden surge of imports exceeding some specified quantity. They’re supposed to give the domestic industry a limited breathing space to adjust to the increased competition. ITC recommendations of such safeguard tariffs have been adopted several times in recent decades by US presidents: for instance, [Reagan slapped a five-year tariff on Japanese motorcycles](http://www.tradereform.org/content/view/1965/52/), [Clinton imposed a three-year tariff on European wheat gluten](http://www.iatp.org/tradeobservatory/headlines.cfm?refID=16347), and of course there was the notorious [Bush steel tariff of 2002](http://en.wikipedia.org/wiki/2002_United_States_steel_tariff). However, most of these tariffs in recent years (and numerous others enacted by other countries) [have been successfully challenged by trading partners as violating WTO rules](http://74.125.93.132/search?q=cache:Y2HPDNuXsUIJ:ksghome.harvard.edu/~RLawrence/America.pdf+Clinton+safeguard+tariffs+ITC&cd=2&hl=en&ct=clnk&gl=us&client=safari). And of course, even temporary tariffs pose impediments to free trade and hamper the efficiency of markets. The debate: Is there any good reason to retain safeguard tariffs in trade agreements, or are they more trouble than they’re worth? If a President does have the safeguard tariff option recommended by the ITC, under what circumstances, if any, should s/he choose to implement it? In particular, do you think it was a good or a bad thing for the Obama administration to impose the Chinese tire tariff? Is it defensible in light of China’s predictable retaliation and its significant influence on the US economy? If China challenges the tariff before the WTO, will they win? ---
**Author:** ![Alex\_Dubinsky](https://avatars.discourse-cdn.com/v4/letter/a/dbc845/32.png) [@Alex\_Dubinsky](https://boards.straightdope.com/u/Alex_Dubinsky)\ **Post date:** [September 13, 2009, 3:29am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/39 "2009-09-13T03:29:16Z")
I’d like to point out that I find it more interesting and thought provoking when discussion winds first from one view to another (as long as it doesn’t devlove into entrenched bickering), than when the OP (or article, etc.) starts off with a balanced exploration of both sides. In the latter case, you end up just not knowing where to base your opinion. It just seems like mush. Anyone share that? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 13, 2009, 3:45am UTC](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852/40 "2009-09-13T03:45:14Z")
[http://www.autonet.ca/autos/news/2009/08/28/10645216-ap.html](http://www.autonet.ca/autos/news/2009/08/28/10645216-ap.html) Yep, China plays it straight so we should never question them. [Previous page](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852.md?page=1) [Next page](https://boards.straightdope.com/t/get-ready-to-pay-more-for-your-tires/509852.md?page=3)