Obama Pursues Trade War With China

It started with President Obama agreeing to impose tarriffs on car tires imported from China. The Administration said that the tarriff was less than the amount requested from US International Trade Commission. President Bush had rejected raising those tariffs four times, but President Obama agreed to impose the tariffs:

The Obama administration will put steep import duties of 35% in the first year on Chinese passenger and light truck tires, responding to what the U.S. International Trade Commission determined to be a surge of Chinese tire exports that has rocked the domestic U.S. tire industry and displaced thousands of jobs, U.S. Trade Representative Ron Kirk announced Friday night.

China's government responded quickly to the announcement, saying in a statement that it "strongly opposes" what it called "a serious act of trade protectionism." China "reserves the right to make further response," the Ministry of Commerce statement said.

On Sunday the ministry said it was investigating U.S. automotive and poultry product imports following complaints from local industries that some of these products are being dumped in the Chinese market or are benefiting from subsidies, "seriously affecting" domestic industries.

The Chinese responded by returning the favor in spades. The Chinese are investigating alleged dumping of American auto and chicken products. The matter will likely get referred to the WTO.

Obama said that he would resist protectionism in order to keep the global economy running, but here is his first real test, and he puts protecting union jobs ahead of the US and global economies. Classic.