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Thread: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

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    Default weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    (snip)"A story released by PRNewswire-USNewswire said that: "Final step in tire trade case confirmed today (September 2nd, 2009) by U.S. trade representative Leo W. Gerard, International President of the United Steel Workers (USW) expressed confidence President Obama will grant the U.S. tire industry meaningful relief from Chinese tire imports that have injured domestic production workers".

    What does this mean? This means that if Obama grants (steals and gives away) this relief (taxpayer money) due to pressure from the mafia-style union (USW), then all of the rest of us will suffer from higher prices on these goods. This is always the case with bailouts, subsidies, and protectionist measures. According to the union thug Gerard, "This is the time and this is the case for the President to open the trade enforcement toolbox". Of course, most sane and intelligent people fully understand that if this "relief" is forthcoming, it is just a strong-arm tactic by the federal government to once again take from the productive in society, and by force, and redistribute to the very non-productive union. (snip)

    Gerard went on to say that "We are confident the President shares our values (emphasis mine) of promoting a rising standard of living for the American worker. This trade case gives him the chance to put into practice his pledge to level the playing field and give all Americans a chance to share in the benefits of balanced trade". This is hogwash and an absolute lie! What he left out, of course, is that all American workers and everyone else not in the tire industry would be harmed by this very corrupt protectionist measure. Only the USW and those retired USW members that are receiving subsidized pensions and medical insurance would benefit from this trade restriction. The hundreds of millions of the rest of us would of course suffer. (snip)

    Just this week, I went shopping for tires for my large diesel pick-up truck. I got prices from three different dealers, two in my home town and one outside of town. The price difference for the exact same four tires ranged from a low of $795.00 to a high of $1,120.00. This is almost a 30 percent difference in price. How can the price spread range that much for the identical tires? Maybe the dealer with the lowest price got his tires from China. These are Cooper Tire & Rubber Co. (an American company) tires, and after a little research, I found out that Cooper not only has plants in China, but is currently expanding its operations there. I have no way of knowing if my tires came from China, or if I am just benefitting due to Cooper’s presence there, but who cares? As long as I get a better deal, I am one happy consumer; and all those who benefit from my saving money; the butcher, the baker and the candlestick maker, are better off as well.

    As an aside, Cooper Tire & Rubber Company, the second largest tire manufacturer in the U.S., is a USW union shop here in America. In their defense, Cooper has opposed levying tariffs on Chinese tires; this in direct opposition to its union workers. Along with Cooper, Toyo Tire & Rubber Company has also spoken out against Chinese tariffs. Toyo builds tires in Atlanta, Georgia, and if they could not import cheaper tires to help support their higher quality lines, they would be hurt. Both of these companies employ a lot of American workers, and if they are harmed, so will their workers be harmed. Goodyear, the largest U.S. tire manufacturer, who also has a plant in China, has not taken a position on this issue due to the fact that only 2 percent of tires sold in America by Goodyear come from China. What a contradiction! The USW and its members are attempting to harm the very companies that employ them. All these companies have Chinese plants because they can’t compete in the U.S. because of the high cost to do business due to union thugs and the government minions who support and protect them. By lobbying for tariffs, the USW is attempting to fatten its wallet at the expense of its own workers and the rest of America, but the members are too ignorant of reality to understand this ruse. The USW members by supporting these government tariffs are in essence attempting to harm the very company they work for, thereby putting their own jobs at risk. This is asinine and it is a stupid decision on their part.

    The bottom line is this: All protectionist practices whether implemented by trade restrictions, tariffs, subsidies, or any other method, are designed to benefit the few at the expense of the many. The few in this case is the USW, and the many is all the rest of us. Sadly, slimy politicians gain favor with voters by implementing these policies; claiming that they care about the American worker and saving jobs, when in fact, nothing could be further from the truth. They are simply preying upon the economic ignorance of the public-schooled masses in this country, hoping to gain more votes during the next election in order to stay in power.

    All I can say is thank God for Chinese tires! With my savings of $325.00 I can buy more food stores, more ammo, more heating fuel, or anything else I need to survive this depression. By doing this, I am supporting other American businesses that employ many more people than do the American tire companies, and therefore am supporting American workers. I’m willing to sacrifice the USW and its workers in order to help all of America"(snip)

    from

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Lew has no concept of the velocity of money in a national economy. Only that he can get cheaper stuff from over seas from communist countries. This thinking is what got us into this mess.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    "Thank God for Chinese Tires!"

    Dude would rather be able to buy cheap Chinese tires for his pickup, than see his President protect American jobs with decent wages. Why? Of course, so he can have some leftover money to buy his ammo with.

    STFU

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    ^^^ the basic point of this article was to point out that by forcing every US tire / car buyer to pay an extra $300 for US tires produced by unionized US workers, this also means that every US tire / car buyer will NOT be able to spend $300 on some other item. Besides decreasing the standard of living of the tire / car buyer ( by requiring that they spend an extra $300 without receiving any additional 'value' in exchange for the additional expenditure) this in turn will precipitate a loss of jobs in a different segment of the US economy ... most likely a segment where the (former) US workers are paid far less than union scale wages !

    A fair amount of precedent stands behind this point ... since FDR accomplished much the same result in the US tire industry in the 1930's.


    Dude would rather be able to buy cheap Chinese tires for his pickup, than see his President protect American jobs with decent wages
    reread the quote ... "All protectionist practices whether implemented by trade restrictions, tariffs, subsidies, or any other method, are designed to benefit the few at the expense of the many. The few in this case is the USW, and the many is all the rest of us. Sadly, slimy politicians gain favor with voters by implementing these policies; claiming that they care about the American worker and saving jobs, when in fact, nothing could be further from the truth. They are simply preying upon the economic ignorance of the public-schooled masses in this country" ... I can only assume that public schools in Canada are similar to their American counterparts.

    ~
    Last edited by Melonie; 09-06-2009 at 12:35 AM.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    I read the quote the first time. It's still full of shit.

    Either you think a decent standard of living is worth protecting, or you don't. A race to the bottom in terms of wages is not worth striving for in any way. If you don't give a shit about what happens to other people, as long as you get your cheap goods, it's the same as not giving a shit about yourself. Eventually it catches up to you. So you pay extra for tires, and everyone gets to have a better life.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Either you think a decent standard of living is worth protecting, or you don't. A race to the bottom in terms of wages is not worth striving for in any way
    In the absence of actual value being created to counterbalance the necessary consumption of maintaining 'a decent standard of living', subsidizing that level of consumption must then be accomplished in one of two ways. The gov't must confiscate money from people who ARE able to create a surplus of actual value, and transfer that money to people who are not able to create enough actual value to counterbalance their 'decent standard of living'.

    Circling back to the original point, keep in mind that if the US gov't decrees that every set of tires in America must be $300 higher in price in order to subsidize / support unionized US tire workers, just like the classic 'Broken Window Fallacy' the redirected $300 in spending ( in exchange for no real value difference between US tires and Chinese tires) also means that $300 will NOT be spent somewhere else ( like for instance on a restaurant meal or a lap dance ).

    The common thread here is that when the gov't decides to 'protect a decent standard of living' for a select few, it does so by degrading the standard of living of the non-select many !

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Well that's the thing Melonie....they do it for all their citizens, not just one industry. Then everyone can live a decent life, instead of a serf's life. Protecting "being able to buy cheap goods", or protecting "being able to make huge profits"...well, these are not top-of-the-line high ideals are they? Helping your citizens to have decent lives/decent jobs would be something worth trying for.

    This is self-evident for most peeps.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Helping your citizens to have decent lives/decent jobs would be something worth trying for
    Totally agreed in theory. However, in the real world, such lofty idealism has typically devolves to the lowest common denominator i.e. the former Soviet Union or Cuba. Ultimately human beings need some 'incentive' to perform at their best. However, when the gov't confiscates the fruits of the labors of productive citizens and transfers it to non-productive citizens such that both share essentially the same de-facto standard of living, the productive citizens quickly deduce that their efforts are not achieving anything ( from a selfish standpoint at least). The former Soviet Union had a common expression for this point ... " we pretend to work, and the gov't pretends to pay us !". I'm not advocating that corporate bosses should earn billions while everyone else wallows in poverty, but I am also acutely aware that the 'middle class' is currently under attack on many fronts as a consequence of attempting to provide decent lives for non-productive neighbors and decent jobs for unionized workers.

    Well that's the thing Melonie....they do it for all their citizens, not just one industry
    this is absolutely not the case ! The gov't chooses winners ( i.e. the UAW and the USW ), and makes everyone else into a loser ( via higher prices for the same goods ).

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Well Mel, I can't see the US slipping into Communism anytime soon. You will have your own particular unique blend of Capitalism/Socialism like all the other developed nations. The amount of Socialism will ebb and flow with the administration in charge at the time. The wealthy will always be wealthy and enjoy their priveleges...there's no chance that they'll have all of their wealth "confiscated", or be reduced to the same standard of living of the folks at the bottom of the scale.

    I don't understand why you resort to these extremes in your posts. It's unrealistic, and it just smacks of fear-mongering.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    The wealthy will always be wealthy and enjoy their priveleges...there's no chance that they'll have all of their wealth "confiscated", or be reduced to the same standard of living of the folks at the bottom of the scale.
    This is undoubtedly true where the future 'wealthy' are concerned. However, it may NOT be true at all for the future 'middle class'.


    I don't understand why you resort to these extremes in your posts
    it's a counterbalance to responses from other posters who include ( what some people view as ) extremes from the 'other end' of the socioeconomic spectrum ... often using the tone that such extremes are actually ( or should be ) 'mainstream' in the USA !

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Quote Originally Posted by Melonie View Post
    it's a counterbalance to responses from other posters who include ( what some people view as ) extremes from the 'other end' of the socioeconomic spectrum ... often using the tone that such extremes are actually ( or should be ) 'mainstream' in the USA !
    Indeed hear hear! More and more I hear crazy stuff and the people saying it think if perfectly reasonable, without fault, and (cough) moderate - even though it is a complete reworking of things.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Quote Originally Posted by Deogol View Post
    Indeed hear hear! More and more I hear crazy stuff and the people saying it think if perfectly reasonable, without fault, and (cough) moderate - even though it is a complete reworking of things.
    What crazy stuff? You mean, like, the sky isn't falling? Or maybe, things might just be ok? Post after post of negative, "we're going to hell in a handbasket" crap needs to be challenged. The United States is a great, free, powerful, wealthy nation...the envy of the world. Someone needs to stand up and say so in the Dollar Den of Doom.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Quote Originally Posted by hockeybobby View Post
    Well that's the thing Melonie....they do it for all their citizens, not just one industry. Then everyone can live a decent life, instead of a serf's life. Protecting "being able to buy cheap goods", or protecting "being able to make huge profits"...well, these are not top-of-the-line high ideals are they? Helping your citizens to have decent lives/decent jobs would be something worth trying for.

    This is self-evident for most peeps.
    Boy oh boy ! A classic example of wish fathering thought. If I have to pay extra for my tires ; and for my car; and for my appliances; and for my food; and my clothing; and soon for my energy (if Cap & Tax passes) then HOW am I benefitting ? Aside from feeling great about myself by having my natural altruism stroked daily ?

    YOU said : they " do it for ALL their citizens". Your words ; not mine. I see it for various industries and a few unions. Where's mine ?

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    well, it's now official !



    (snip)In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires from China, a move that fulfills his campaign promise to "crack down" on imports that unfairly undermine American workers but risks angering the nation's second-largest trading partner.

    The decision is intended to bolster the ailing U.S. tire industry, in which more than 5,000 jobs have been lost over the past five years as the volume of Chinese tires in the market has tripled.

    It comes at a sensitive time, however. Leaders from the world's largest economies are preparing to gather in Pittsburgh in less than two weeks to discuss more cooperation amid tensions over trade.

    The tire tariff will amount to 35 percent the first year, 30 percent the second and 25 percent the third. (snip)

    If you're a member of the United Steelworkers Union working at a US tire plant, this means you can keep your fat paycheck. If you're not, this means that you must now pay more money to purchase both Chinese and US tires ... or anything which includes new tires from cars to lawnmowers.

    The next 'shoe to drop' is the possibility of similar measures now being imposed by China on exported US products.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    My last set of tires, made in a modern factory in the U.S.A., cost less than $400 and certainly cost the dealer less than $300.

    I haven't bought Chinese tires, but I may have bought American brand valve stems made in China, produced by the same company whose stems were recalled because their rubber rotted prematurely (not resistant enough to ozone). You should see how tires are made in China, with plenty of touching from workers with greasy hands, exactly what you want for a product held together with glue meant to be applied only under scrupulously clean conditions.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    My last set of tires, made in a modern factory in the U.S.A., cost less than $400
    Allow me to ask two dumb-ass questions ...

    A, How do you know that your new tires with an American brand name weren't actually made in China ?

    (snip)"Cooper made the same decision many Americans companies do - to manufacture cheaper, lower-margin tires abroad "(snip) from traderoots.org

    (snip)"Bridgestone-Firestone sells china tires marked as Primewells and Fuzions for their "house brands"(snip) from somethingawful.com

    (snip)"Goodyear Tires Moving More Production To China With 42Cents An Hour Labor

    Goodyear Tires, the mainstay of tires for both Nascar and NHRA racing is moving more and more of it's production to China with 42cents an hour labor unfairly competing against American labor union, Steelworkers Union members. Currently many Goodyear union members are on strike, replaced by nonunion workers while more production is being sent to China. It seems to be a major union busting effort.

    Goodyear claims this has moved the company towards better profitablity, however it is just another trend more high paying union jobs flowing from the U.S."(snip) from

    B. even if your recently purchased American brand name tires were manufactured in America via highly paid USW union labor, how do you know that they were actually produced at a net profit to the tiremaker, as opposed to being produced at a loss that must be made up for at the corporate level by profits earned from imported Chinese tire sales ?

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    and speaking of the 'next shoe to drop', now that President Obama has approved tariffs on Chinese tires, the next ruling on deck will likely result in the Chinese imposing import tariffs on American chicken ... which in turn will increase the price of American produced chicken both in China and in America ...

    (snip)" others worry a ruling against imports could have a ripple effect. “If the president grants relief to the tire workers, it raises the likelihood of - retaliatory is too strong a word - some kind of response that would negatively impact U.S. imports to China,” predicted Yeutter, the former U.S. trade representative. Yeutter said the notion that the United States and China are headed toward a “trade war” was incorrect. Increased commerce between the two countries, he notes, has the effect of increasing the number of disputes in certain industries. But Yeutter allowed that there could be a spillover effect. “The Chinese may be holding off a bit on applying serious or severe import constraints on chicken until they see what happens on tires.” In China last week, Lt. Gov.Halter said none of the Chinese officials he met with at the ministries of foreign affairs and commerce made any explicit connection between the two cases. But “they made it very clear they’re watching the U.S. determination on tires.” "(snip) from

    ... which illustrates the 'loose cannon' nature of protectionist tariffs ! By opting to protect his United Steel Workers supporters from lower cost Chinese competition, President Obama may have set in motion a chain of actions and reactions that will 'harm' workers in other, non-related, US industries as well as lowering the standard of living for all Americans (except the United Steel Workers) via increasing the price they must pay for new tires, for chicken, and for heaven knows what else.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    We will NOT get away with this.

    To "save" 5,000 USW jobs in the tire industry we have pissed off the Chinese who have already retaliated.

    A "trade war" is the last thing we need.

    What this tells me is that Obama and the Dems are trying to limit what will be substantial losses in next years' elections. God forbid the folks in Ohio and Michigan might wake up and realize that Obama and the Dems sold them a bill of goods.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    ^^^ yeah but look at the 'bright side'. Now that the ice has been broken re Chinese tire tariffs, very little additional negative publicity will result if President Obama chooses to also impose import tariffs on a wider array of Chinese products, such as appliances, textiles etc. Doing so would 'save' even more US union jobs ... albeit at the expense of forcing US consumers to pay even higher prices for appliances and textiles as they are now forced to pay for new tires ! After all, what are the odds that a majority of Americans will connect the dots and realize that the extra $300 they must now pay for a set of new tires ( or the future extra $200 they must pay for a refrigerator, or the extra $2 they must pay for new underwear) is actually occurring in order to subsidize US union workers who earn far more than they do ?

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Quote Originally Posted by Melonie View Post
    In the absence of actual value being created to counterbalance the necessary consumption of maintaining 'a decent standard of living', subsidizing that level of consumption must then be accomplished in one of two ways. The gov't must confiscate money from people who ARE able to create a surplus of actual value, and transfer that money to people who are not able to create enough actual value to counterbalance their 'decent standard of living'.

    Circling back to the original point, keep in mind that if the US gov't decrees that every set of tires in America must be $300 higher in price in order to subsidize / support unionized US tire workers, just like the classic 'Broken Window Fallacy' the redirected $300 in spending ( in exchange for no real value difference between US tires and Chinese tires) also means that $300 will NOT be spent somewhere else ( like for instance on a restaurant meal or a lap dance ).

    The common thread here is that when the gov't decides to 'protect a decent standard of living' for a select few, it does so by degrading the standard of living of the non-select many !
    Tariffs aren't going to make the cost of tires $300 more expensive for most vehicles, only vehicles that require extremely expensive tires. For many vehicles you can get an entire set of tires for around $300. I looked up the cost of tires for a Corolla at a random site, and tires start at $77.

    http://www.discounttiredirect.com/di...w=false&cs=215

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Quote Originally Posted by Melonie View Post
    ^^^ yeah but look at the 'bright side'. Now that the ice has been broken re Chinese tire tariffs, very little additional negative publicity will result if President Obama chooses to also impose import tariffs on a wider array of Chinese products, such as appliances, textiles etc. Doing so would 'save' even more US union jobs ... albeit at the expense of forcing US consumers to pay even higher prices for appliances and textiles as they are now forced to pay for new tires ! After all, what are the odds that a majority of Americans will connect the dots and realize that the extra $300 they must now pay for a set of new tires ( or the future extra $200 they must pay for a refrigerator, or the extra $2 they must pay for new underwear) is actually occurring in order to subsidize US union workers who earn far more than they do ?
    As I mentioned in my previous post, most Americans won't be paying anywhere near $300 extra for tires.

    Your original article doesn't mention that the tariffs were put in place due to the Chinese government subsidizing tire manufacturers.

    http://www.forbes.com/2008/07/09/chi...markets02.html

    (snip)
    "After a thorough investigation, the Department of Commerce has found that Chinese exporters of off-the-road tires have received government subsidies and sold at below the cost of production in the United States," said Assistant Commerce Secretary David Spooner.
    (snip)

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    I looked up the cost of tires for a Corolla at a random site, and tires start at $77.
    check that site again in a month, after their stock of pre-tariff Chinese tires has been exhausted !


    However, ultimately, the larger point ( and higher overall cost ) will stem from the 'proliferation' of tariffs into other products ... including US export products. The Chinese have now officially 'fired back' upon Obama's first shot of an impending trade war ...

    (snip)A full-blown trade row erupted on Sunday night between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles (snip)

    (snip)Chen Deming, China’s minister of commerce, condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades.

    “This is a grave act of trade protectionism,” Mr Chen said in a statement. “Not only does it violate WTO rules, it contravenes commitments the United States government made at the [April] G20 financial summit.”

    China said it would now investigate imports of US poultry and vehicles, responding to complaints from domestic companies (snip)

    (snip)The dispute comes less than a fortnight before Mr Obama is due to host world leaders at a summit of G20 nations in Pittsburgh and ahead of his planned visit to China in November.

    The decision to impose extra tyre tariffs followed a petition by the United Steelworkers union, which represents workers at many US tyre factories. Official figures show an increase in imports from 14.6m in 2004 to 46m in 2008.

    Eswar Prasad, professor of trade economics at Cornell University, warned that the disagreement could escalate.

    “These protectionist measures, some of which amount to domestic political posturing rather than substantive restraints on trade, could easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries,” he said (snip)

    courtesy of Financial Times Ltd. ( UK ) from


    Department of Commerce has found that Chinese exporters of off-the-road tires have received government subsidies
    a perfect reason for China to justify the imposition of new tariffs on GM / Chrysler cars imported into China !


    and sold at below the cost of production in the United States
    Given US union wage rates, US energy costs / taxes, US environmental compliance costs, US worker safety compliance costs, US mandated benefit costs etc., selling Chinese made products at prices HIGHER than the US cost of production of equivalent products would be considered as price gouging / windfall profiteering in most rational discussions !


    I would also re-emphasize Minister Chen's comment that President Obama's decision directly countervenes US gov't commitments made at the last G20 summit only a few months ago. Beyond the tariff issue itself, President Obama's 'breaking of an official US Gov't promise' potentially undermines all future US foreign policy developments - because the rest of the world must now question / doubt that the US will keep it's word / honor previous international commitments if it becomes 'inconvenient' to do so ! This officially begins a 'slippery slope' situation for future US policy in the middle east, in Israel, in Taiwan, in Colombia etc. if these countries now doubt previous US commitments will actually be honored if there is a US 'domestic' political advantage to be gained by not doing so.

    ~
    Last edited by Melonie; 09-13-2009 at 03:38 PM.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    I don't understand why you resort to these extremes in your posts. It's unrealistic, and it just smacks of fear-mongering.
    Melonie is helping us understand what's coming. We should be appreciative of her effort! The system based on pretending to work (aka death of capitalism, hello America!) can't prosper. When the Soviet Union collapsed, it wasn't fun! Trust me, I was there when it happened. Life in the former USSR was NEVER the same as before the collapse.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Adelina,

    There's no comparison between the US and the former Soviet Union.

    The reason why "it wasn't fun" when the Soviet Union collapsed was because the unfettered free market policies that Melonie advocates were forced upon the people of the former Soviet Union, and the results were disastrous.

    On the other hand, China's government has been moving from a state-run economy to a free market economy much more gradually with significant government intervention in the economy. The results of China's policies have been far more successful.

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    Default Re: weekend commentary - Protectionist measures on Chinese tires may cost you $300 !

    Well, it remains to be seen how successful or not the US government's intervention into the market economy plays out!

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