Trade restriction silliness

The latest Bloomberg Businessweek warns readers to “beware politicians bearing election-year trade deals.”

Calculating the impact tariffs have on jobs is a complex game. A lot of the numbers that get tossed around “are hypothetical,” says Ann Harrison, a Wharton School economist who studies trade and labor markets. “Governments use them when they want to be seen to do something, when they need a quick fix.” …

… It’s hard to see how the tariffs ranging from 25 percent to 35 percent that were imposed on Chinese tire imports beginning in 2009 have helped employment in the American tire industry. Three years ago tire companies operating in the U.S. employed 55,000, according to the Bureau of Labor Statistics. In 2011 that figure dropped to 51,700. Meanwhile, imports of Chinese tires fell 30 percent, while imports from other countries, including Taiwan, South Korea, Thailand, and Mexico, increased by higher percentages, the U.S. International Trade Commission says.

During his State of the Union address in January, President Barack Obama asserted that the tariffs on tires had saved 1,000 jobs. “Over a thousand Americans are working today because we stopped a surge in Chinese tires,” he said. The data doesn’t support that claim, and the tire industry sees things differently. “We found these tariffs have not created any more American jobs, but they have hindered commerce,” says Mark Cook, a spokesman for the Tire Industry Association.

Want to help the economy? Promote economic freedom. A key element of economic freedom: free trade.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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