Tire tariffs

October 22, 2012

Obama likes to boast that he has been tough on China, demanding a level playing field and bringing cases against China for violating fair trade standards. He claimed that the tariff imposed on Chinese tires helped create U.S. jobs. At the time the case was brought in 2009,  Romney was skeptical, saying that such protections that may work temporarily for U.S. workers -- but not over time.

"As those tires come in it does hurt them directly, and therefore what their response is, their immediate response is, 'don't let them in,' Romney said in 2009, speaking of American tire manufacturers requesting federal aid. "But ... my experience is over time, they will lose out slowly but surely, as they protect their lack of productivity with barriers, they will become less and less competitive ... until finally even the tariff can't hold them out and the foreign products come flooding into the marketplace and the domestic guys are gone. So putting barriers up, trying to put walls up, in my opinion is a defeating strategy and will yield ultimate decline and collapse. ... We're going to have to find a way to use our ingenuity and our investments, new capital, we're going to have to find way to compete or we're gonna be gone."

Romney's position on the Obama administration's tire case has not changed. Aides cited reports that the tire action simply shifted imports from China -- to Mexico, Thailand and other low-wage countries. A recent paper from the Peterson Institute says that the tariff saved only 1,200 jobs at a cost of $1.1 billion in higher prices.

Obama still cites the tire case as an example of his fighting for fair trade on behalf of American workers. Romney stands by his 2009 remarks suggesting the tire case was an example of protectionism that may work temporarily for American workers -- but
not over the long term.

Still, Romney and Obama have spent much of the 2012 campaign competing with each other to see who could sound toughest on allegations of Chinese cheating on trade and currency rules.

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Melissa Bell | October 22, 2012