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It's time to shout 'protectionism' at U.S.
Dan Drezner
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TEXT OF COMMENTARY
Tess Vigeland: In a couple of days world leaders will gather at the G-20 summit in Pittsburgh. The agenda is likely to include all kinds of trade policy issues, with key discussions between President Obama and Chinese President Hu over barriers to trade. Commentator Dan Drezner says when it comes to things like tariffs, the administration is headed down a slippery slope.
DANIEL DREZNER: We free traders are an excitable lot. If trade talks hit a snag, we fret that it is the beginning of Smoot-Hawley II, even though the world trading system has weathered the Great Recession in reasonably good shape.
Recently, however, the Obama administration announced a decision to slap a 35 percent tariff on Chinese tire imports. True to form, free traders were incensed. But isn't this an overreaction? Six years ago when the supposedly trade friendly Bush administration imposed steel tariffs, they reversed course after the World Trade Organization decided they were illegal. Won't the WTO eventually patch up this contretemps as well?
I want to say yes. I want to believe that the system is pretty robust. Since Obama was inaugurated, I've been resisting the urge to reflexively shout "protectionism." Unfortunately, I think it's time to start shouting.
The tire tariff isn't your garden-variety form of protectionism. Due to the 2001 agreement that allowed China to join the WTO, if any one member decides to impose safeguards on Chinese imports, other countries can immediately follow suit. And China already has plans to retaliate by raising tariffs on U.S. exports of poultry and auto parts. It doesn't take a genius to see how bad it could get and fast.
My real concern, however, is the nature of Obama's political base. Bush's steel tariff fulfilled an isolated campaign promise to the people of West Virginia. With Obama, however, this dip in the protectionism pool feels like the beginning of something much greater. The AFL-CIO has described this measure as "the president's first down payment" on future barriers to imports. Unions are already demanding additional action against Chinese steel.
All presidential administrations engage in protectionism. But the Clinton and Bush administrations could also point to ambitious trade agendas as well. Barack Obama has no such record to fall back on. Indeed, it seems clear that Obama will use trade policy as a payoff to his base in order to keep them behind his major policy initiatives, like health care. With the global economy in a fragile state, protectionism is a terrible way to build a recovery.
VIGELAND: Daniel Drezner is a professor of international politics at Tufts University.
Drezner is wrong. It is too early to state that Obama has a protectionist administration. Comparing Obama's short record to Clinton and Bush, both two-term Presidents, is irresponsible at best and scurrilous at worst.
Why not comment on the difficulty of keeping to a trade policy that relies on fewer barriers? Doesn't it depend on whose ox is gored?
China lost a fight over keeping western media, particularly movies, from its shores. It claims that it has a right to keep out immoral products. That complaint sounds very hollow when China is such a massive carbon and pollution emitter. Which is more immoral?
But why do you keep going to to ideologues to give commentary on current issues? Pick someone thoughtful and judicious, not ideologues.
"With the global economy in a fragile state, protectionism is a terrible way to build a recovery."
This is the perfect reason to use this tariff card.
Why does Marketplace keep talking about this subject without giving the reason why there is a tariff? KEYWORD: Dumping.
2nd, China needs to open up their markets more for us to feel their tariff response. All their stuff gets sold over here.
I disagree with Mr. Drezner's and other free trade advocates’ assumption that Smoot-Hawley caused the Great Depression. The Great Depression was caused by a sudden and prolonged lack of investment confidence by America’s wealthiest citizens. Thanks to a mal-distribution of wealth, a handful of cowards at the top of American society were able slow America’s economic activity by simply holding onto their massive piece of the pie. Prosperity depends on money circulating freely to all sectors of society.
Free trade has crippled this country and the world by directing money ever upwards into the hands of the world’s privileged few. Mr. Drezner refers to President Clinton’s trade policy as robust. If NAFTA was good trade policy, why did so many Mexican citizens leave their country for the USA? I second Mr. Tagrin: “To hell with free trade. It's time to go back to FAIR trade.â€
It is so good to see that people are becoming less like sheep in following the free traders mantra. Free trade - who cares about it! It is no god. We need self-sufficiency like we once had and that made us rich. We are not like the Dutch who can live as a rentier society from all their foreign investments. We need to make all our own products by our own people. Let's charter a slow boat to China for the free traders and traitors.
Practically every single product you look at in a store says Made in China. Everything I shop for I examine to find one Made in the USA, or at least somewhere other than China. We either need Protectionism or we need every American consumer to do what I do and just not buy if they can't find something made somewhere other than China. Maybe then the CEOs of all these American companies that no longer manufacture in the US would begin to get the idea.
Proponents of Free Trade like to blame Smoot-Holly for causing or strongly contributing to the Great Depression.
Smoot-Holly was made law in June 1930, well into the Depression. GNP was 6% in 1930 and dropped to about 2% in 1932. Much of the drop was natural due to the spreading of the Depression throughout the world. To blame a 4% GNP change for causing the Depression is ridiculous.
China, Japan and others have always had protectionist policies. China's stimulus program, for example, requires all money to go to Chinese owned companies. Free-traders don't like to mention this. Free trade is in the interest of corporations, not workers. The US economy depends much more on our workers having a good wage than on corporate profits. Unfortunately, politicians listen more to the green money from those corporations and wall street than they do to the average worker.
I also shout "Protectionism" but in my case I shout FOR protectionism. What's wrong with protecting Amereican companies, American workers, and America's industrial base? It's time to look at Alexander Hamilton's industrial policy and see how well it protected us as we grew into the world's economic powerhouse. Reagan, Bush I, Clinton, and Bush II have all sold our nation to the World Trade Organization and international companies with no loyalty toward this nation. It's time to scrap that failed policy and return to protecting our international base. China, Japan, South Korea, India, and many other nations apply far larger tarifs to American imports than we do to theirs.
To hell with free trade. It's time to go back to FAIR trade.
