WASHINGTON – The protests and threatened retaliation from Beijing over President Obama’s decision to add a 35 percent tax on tires imported from China probably won’t lead to a trade war, the U.S. Chamber of Commerce predicted Tuesday.
But Obama’s action – cheered by unions and backed by manufacturing state lawmakers, including Rep. Mark Souder, R-3rd – won’t create a single American job, the business lobbying group said.
The Steelworkers Union, which filed the trade case, said the dramatic increase in imported Chinese tires in the last few years led to a drop-off in U.S. made tires and layoffs for 5,000 Americans who worked at tire plants.
Chamber Vice President of International Affairs John Murphy said the 5,000 layoffs caused by the Chinese tire surge pales in comparison to the jobs that would be eliminated or not created if "America fails to move forward" in trade policy.
The Chamber issued a report Tuesday warning that more than 585,000 U.S. jobs are at risk if the Obama administration doesn’t become more aggressive on trade issues.
Laura Baughman, author of the study, said some of the 585,000 are jobs that would be eliminated; others are jobs that won’t be created. She said she didn’t calculate how many of each.
Murphy said the Obama administration should push Congress to act on trade agreements with Colombia and Korea; soften the "Buy America" provisions Congress added to the stimulus legislation; and resolve the disagreement between the U.S. and Mexico on trucks.
Souder signed a letter the day before Obama’s decision urging the president to punish China and "set a precedent for the validity and use" of the provisions of the World Trade Organization that allow for penalties if a dramatic increase in imports hurts a domestic industry.
Souder typically agrees with the Chamber of Commerce’s positions in at least 70 percent of the votes the trade group feels strongly about.
But he doesn’t agree with the Chamber’s prescription for Obama’s trade policy.
Souder said he supports free trade agreements with Colombia but not Korea, judging all proposed trade pacts by how they affect industries in northeast Indiana.
He said he also disagrees with the Chamber’s push to allow Mexican trucks to operate in the U.S., siding with the Teamsters Union. Souder said Mexican trucks don’t have to meet the same safety standards as U.S. trucks, so it amounts to an unfair advantage.