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It’s time to shout ‘protectionism’ at U.S.

Marketplace Staff Sep 22, 2009
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It’s time to shout ‘protectionism’ at U.S.

Marketplace Staff Sep 22, 2009
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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.

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