US tariffs on Chinese tires fail to save jobs

2017-01-13 07:40:01 Global Excel Tyres Co.,ltd Read

Recently, the US media published a report entitled "Obama tough on China, the cost is the United States lost their jobs and rising prices."

The article said that in order to protect the US employment opportunities, to be tough on China. This is the implication of US President-elect Donald Trump threatening to impose a tariff of 45% on China, which aims to restore US jobs.

However, before the strategy, Trump may need to figure out what happened when his predecessor tried this.

Americans pay a higher price for tires

In 2009, Obama imposed a high tariff of 35% on Chinese tires. Earlier, US companies have protested unfair competition, claiming that China occupied the United States with cheap tires, leading to loss of competitiveness of US companies.

The tires will then gradually decline in tariffs, and in 2012 canceled.

The article said that the tariff to save the 1,200 US tire companies employment opportunities, after the industry's jobs fell sharply. After a significant cut in production, the US tire production rose again.

"Because we have prevented the influx of Chinese tires, thousands of Americans are guaranteed jobs," Obama said in his State of the Union address in 2012.

But, according to a study by the Peterson Institute for International Economics, the imposition of tariffs has cost Americans a lot in many other ways.

Americans pay a higher price for tires. Some Chinese-made tire prices rose 26%, the average price from about 31 US dollars per tire rose to 39 dollars.

Tire makers in the United States have raised their domestic tires by 3.2% due to reduced competition.

According to the research model of the Institute, tires tariffs caused by the rise in the price of Americans to spend 1.1 billion US dollars, equivalent to 3731 retail jobs lost.

US tire manufacturing employment fell

In addition, China imposed a punitive tariff on chicken products imported from the United States as a counterattack.

Peterson Institute for International Economics estimates that China's counterattack to US chicken producers lost 1 billion US dollars in sales.

"Protecting US tire production does not change China 's policies effectively, nor can it promote US jobs," said Gary Hoffbauer, a trade expert and report writer for the institute.

The article said that the tariff did not let the tire manufacturing employment rate back to the previous level, the US other manufacturing industry is facing the same trend. However, this does, to some extent, curb the loss of employment opportunities.

In 2008, the US tire manufacturing industry has about 60,000 employees, there are currently around 55,000. Although this figure is higher than the lowest in 2010, but still can not reach the level before the tariff levy.

The Obama administration's anonymous official questioned some of the calculations and assumptions of the Peterson Institute for International Economics. For example, the official noted that the increase in tire prices was not as much as the study mentioned.

Hoffbauer said the report came four years, no one has questioned his analysis of the results.

He pointed out that the government official did not give other estimates of price changes.