If you increase prices on Chinese made products less people will buy the Chinese made products. People will buy the American products because of their lower prices.

Let’s put some numbers on this. China Tire Co. sells a model for $60. USA Tire Inc. sells an equivalent for $75. I, budget-conscious tire shopper, have the choice of equipping my car with tires for $240 with four China Tires or $300 with four USA tires.

China Tire Co. is slapped with a 35% tarriff, with the new price of their product now being $81. I, budget-conscious tire shopper, now have the choice of equipping my car with tires for $324 with four China Tires or $300 with four USA tires.

In the simple scenario I described, my point is absolutely true. Millions of tire buyers have to pay more so a few thousand can keep their job.

Let’s make it more interesting…

That might be true if there were no other Tire Companies that the American Tire Companies compete with. You think the Chinese are the only ones who use price as a form of competition?

We introduce two new companies to our scenario: French Premium and Japanese Economy. French Premium sells an equivalent for $100 while Japan Economy sells one for $70. Now, the four options for equipping a car are:

USA: $75 x 4 = $300
China: $81 x 4 = $324
French: $100 x 4 = $400
Japan: $70 x 4 = $280

The budget-conscious buyer is going to be buying tires from Japanese Economy, not USA Tire.

Even still, millions of tire buyers end up paying more for tires so a few thousand Americans can keep their jobs. Nothing you’ve said refutes my point.

This assumes that the tariffs are the only things that would save those jobs. There’s an alternate approach that is better for the Chinese *and* better for the American people. When government examines the way it is hobbling its producers through taxes and regulations and then lifts some of the weight off the producers shoulders, producers are able to make more product at a lower price while still paying as much or more than before.

The corporate tax rate in this country is an obscene 35%. Every US-based company in the American tire supply chain is coughing up 35% of its income to Uncle Sam instead of using it to save or create jobs.

Why is this not being discussed? Legislators would rather use tariffs to hobble international competitors than give up the revenue that fuels their own power.

Tariffs make no economic sense, and hurt the people they’re purported to help. This has been true since the founding of the US, and there have been myriad examples of this, the most blatant being the Smoot-Hawley Tariff Act.

Logic and history reveal the ignorance of your thinking on this subject. I’m sure you’re a perfectly unobjectionable, even pleasant individual, but your thinking and the arguments flowing from it on this subject are provably wrong.

“The duties are to be imposed on September 26th under a part of American trade law known as “Section 421”. The American government argues that these tires are being imported into America from China in “such increased quantities and under such conditions as to cause or threaten to cause market disruption to domestic producers” of competing tires.

America imported tyres worth $1.3 billion from China between January and the end of July this year. Under the terms of China’s accession to the WTO in 2001, countries have the right to impose tariffs in response to a “surge in imports” from China.”

http://www.economist.com/businessfinance/displayStory.cfm?story_id=14442673

btw maybe we can get all those in the poultry industry to make tires now that China has responded. (From the rubber chicken dept.)

The whole tire issue is minor to what the Chinese may do in retaliation. They are a huge trading partner with us and they finance a majoirty of our debt. Without them financing that debt interest rates will have to increase to find others to finance it. That will hurt us all and may push us right back into a recession all over a few jobs being lost to cheap chinese tires so that the poor in the US can afford them. So the poor will have a harder time making ends meat, a few Americans may get a manufactruing job back, but very few, the price of all tires will likely increase, interest rates may increase some, and the Chinese may retaliate in some other manner that hurts not only Americans but the overall world economy as well. Sounds like a winner to me.

Why don’t we stick to the issues – not personal attacks.

I just don’t want the government telling me I have to pay more for something merely because it comes from another country.