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LMAODown at the Chinese outlet store in Albany known as Wal-Mart
It's funny because it's true.
The Return of Protectionism
by Patrick J. Buchanan on September 15, 2009
Down at the Chinese outlet store in Albany known as Wal-Mart, Chinese tires have so successfully undercut U.S.-made tires that the Cooper Tire factory in that south Georgia town had to shut down.
Twenty-one hundred Georgians lost their jobs.
The tale of Cooper Tire and what it portends is told in last week’s Washington Post by Peter Whoriskey.
How could tires made on the other side of the world, then shipped to Albany, be sold for less than tires made in Albany?
Here’s how.
At Cooper Tire, the wages were $18 to $21 per hour. In China, they are a fraction of that. The Albany factory is subject to U.S. health-and-safety, wage-and-hour and civil rights laws from which Chinese plants are exempt. Environmental standards had to be met at Cooper Tire or the plant would have been closed. Chinese factories are notorious polluters.
China won the compe ion because the 14th Amendment’s “equal protection of the laws” does not apply to the People’s Republic. While free trade laws grant China free and equal access to the U.S. market, China can pay workers wages and force them to work hours that would violate U.S. law, and China can operate plants whose health, safety and environmental standards would have their U.S. compe ors shut down as public nuisances.
Beijing also manipulates its currency to keep export prices low and grants a rebate on its value-added tax on exports to the U.S.A., while imposing a value-added tax on goods coming from the U.S.A.
Thus did China, from 2004 to 2008, triple her share of the U.S. tire market from 5 percent to 17 percent and take down Cooper Tire of Albany.
But not to worry. Cooper Tire has seen the light and is now opening and acquiring plants in China, and sending Albany workers over to train the Chinese who took their jobs.
Welcome to 21st century America, where globalism has replaced patriotism as the civil religion of our corporate elites. As Thomas Jefferson reminded us, “Merchants have no country.”
What has this meant to the republic that was once the most self-sufficient and independent in all of history?
Since 2001, when George Bush took the oath, the United States has run $3.8 trillion in trade deficits in manufactured goods, more than twice the $1.68 trillion in trade deficits we ran for imported oil and gas.
Our trade deficit with China in manufactured goods alone, $1.58 trillion over those eight years, roughly equals the entire U.S. trade deficit for oil and gas.
U.S. politicians never cease to wail of the need for “energy independence.” But why is our dependence on the oil of Saudi Arabia, the Gulf, Nigeria, Canada, Mexico and Venezuela a greater concern than our dependence on a non-democratic rival great power for computers and vital components of our weapons systems and high-tech industries?
As Executive Director Auggie Tantillo of the American Manufacturing Trade Action Committee compellingly argues:
“Running a trade deficit for natural resources that the United States lacks is something that cannot be helped, but running a massive deficit in manmade products that America easily could produce itself is a choice—a poor choice that is bankrupting the country and responsible for the loss of millions of jobs.”
How many millions of jobs?
In the George W. Bush years, we lost 5.3 million manufacturing jobs, one-fourth to one-third of all we had in 2001.
And our dependence on China is growing.
Where Beijing was responsible for 60 percent of the U.S. trade deficit in manufactured goods in 2008, in the first six months of 2009, China accounted for 79 percent of our trade deficit in manufactured goods.
How can we end this dependency and begin building factories and creating jobs here, rather than deepening our dependency on a China that seeks to take our place in the sun? The same way Alexander Hamilton did, when we Americans produced almost nothing and were even more dependent on Great Britain than we are on China today.
Let us do unto our trading partners as they have done unto us.
As they rebate value-added taxes on exports to us, and impose a value-added tax on our exports to them, let us reciprocate. Impose a border tax equal to a VAT on all their goods entering the United States, and use the hundreds of billions to cut corporate taxes on all manufacturing done here in the United States.
Where they have tilted the playing field against us, let us tilt it back again. Transnational companies are as amoral as sharks. What is needed is simply to cut their profits from moving factories and jobs abroad and increase their profits for bringing them back to the U.S.A.
It’s not rocket science. Hamilton, James Madison and Abraham Lincoln all did it. Obama’s tariffs on Chinese tires are a good start.
LMAODown at the Chinese outlet store in Albany known as Wal-Mart
It's funny because it's true.
There was a box in my house, unopened since a move my wife and I made in 1991 - from our rental to our first mortaged home; it, somehow, managed 4 successive moves without being opened.
I noticed it in the attic a couple of months ago, and its contents, as you can imagine, not having been missed for 18 years, were unremarkable; except for 1 thing: many, many of the little incidental things in there: Christmas tree stands, measuring cups, a door mat, COAT HANGERS, a stapler; bore the "Made in the USA" label. And to an item were FAR better constructed and durable than an equivalent item you might buy today. We as a people have been conditioned, over time, to accept crap and disposibility in damn near everything we purchase, as long as its cheap; regardless of where it came from.
Most favored nation status for China was a HORRIBLE idea; brought to you by a President from Arkansas. Anyone remember where Wal-Mart is based? There are no coincidences.
5 years ago I would have hated the idea of tariffs and protectionism. I have begun to see the light. Free markets can ONLY work when the playing field is at least a little bit level.
I expect the majority of conservatives to look at this very seriously... and then demand that we get rid of all these 'health' and 'environmental' restrictions that are holding back American corporations from maximizing their profit.
Why stop there? We could repeal the minimum wage too.
The obvious solution is to emulate the Chinese, right?
It's also the way we want it. Sure, we'll pretend to get upset when we hear stories like these. But when it comes time to literally put our money where our mouths are, we're not up to the task. We just like living in this dreamworld where Americans making lavish wages produce goods that we can buy cheaply.
Of course! That's what made America great! A Bible in every home, and a child in every factory! GOD BLESS AMERICA!
The health and the environmental restrictions are fine. I wish we'd cut business income tax rates in half.
Tariffs make this possible to do, as pointed out in the OP.
Pffft Winehole. You keep forgetting that in every instance of taxes being cut, production goes up and America benefits. You don't need tariffs to balance them out.
Here, let me show you.
Step 1. Cut taxes.
Step 2. ?????
Step 3. Profit
Also, the participants should be free. Countries with unfree people and unfree capital are not equal partners in *free* trade. They have an an unfair advantage. Trade policy used to address this, and still should.
Well, that assumes that the tariffs level the playing field between the US and China and they are the only ones playing. But tires come from other places too and they are going to be cheaper from there if not as cheap as from China. Not so sure I like this move at all.
Not all of those places are "most favored", so the traction they get is likely to be limited, nor do other countries have the same kind of leverage the Chinese have, as our lender of first, last and only resort besides the Fed.
No, that's true, but this move doesn't necessarily gain anything for Americans other than higher costs.
Don't get me wrong, I've never been Mr. Laissez-faire but I'd like to be pragmatic about what this means before I don the USA Pom Poms.
Michelin = France
Yokohama = Japan
Pirelli = Italy
Goodyear = USA
Cooper always managed to compete with the big boys by being a quality tire for less $$$. Their niche got wiped out by the Chinese. The bottom line is MAYBE TIRES JUST OUGHT NOT BE SO DAMNED CHEAP! If we, as a country, feel it is right to burden our company's with minimum wage, hour, and other regulatory hurdles - and quite possibly, if "card check" passes, additional demands from reinvigorated unions; why must those companies ALSO be burdened with competing with foreign companies which have no such burdens upon them. By buying products, then from those companies, aren't we also saying those regulations and hurdles are, really, just feel-good bull ? That we LITERALLY want someone else to pay for laws we pass to make ourselves feel good?
Paying less for your tires could mean putting Americans out of business. How you settle this is between you and your conscience.
(Written from my Chinese-made Lenovo ThinkPad)
True. A worthy concept. But does our government have the balls to put tariffs on chinese manufacturers when they're so dependent on chinese banks?
Putting tariffs on tires, supposing Obama goes through with it, is a start. Though somehow I doubt the protection will be coupled with income tax abatement.
Personally, I prefer Michelin and Yokohamas.
And Kumho tires are from Korea, I believe.
Face it, the US is not going to be all that compe ive when I comes to manufacturing. Our costs are just too high. We either have to artificially alter the market and force people to buy more expensive, i.e. American, products, or Americans that work in these fields will simply have to learn new trades.
Where are all those damn green jobs, anyway?
I have not owned an American-made vehicle in almost two decades and I sleep fine at night.
Good thing we didn't have this at ude in our first hundred years as a nation.
Face it, throwing up your hands in the face of globalization sucks as an industrial policy.
Ours is a post-industrial economy and has been for quite a long time.
Votaries of progress will demur, but our government is still supposed to protect long-term US interests, like self-sufficiency, and like having a real core of productive value to on which to base debt-financed growth.
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