expat_panama
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- Apr 12, 2011
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Exerpt; read more at KLECKNER: Obama risks trade war with China - Washington TimesI will go anywhere in the world to open new markets for American products, President Obama said last week in his State of the Union address.
He also indicated that hes willing to risk a trade war with China, possibly leading to a swift closure of new markets for U.S. goods and services - the exact opposite of his stated goal.
Mr. Obama entered the White House three years ago as a protectionist candidate who spoke of withdrawing from the North American Free Trade Agreement. Once in office, he felt the burden of responsible governance and reversed course, promising to double exports in five years and embracing the free-trade agreements negotiated by his predecessor.
Last week, however, the president switched back to campaign mode. He defended his record on trade but also went on the offensive against China, announcing the creation of a trade enforcement unit that will investigate unfair trading practices, search for counterfeit or unsafe goods and file formal complaints, presumably with the World Trade Organization.
[snip]
Meanwhile, China retaliated with its own tariffs on American chicken exports, doubling the prices of some products and shrinking the U.S. share of Chinas chicken market. The move was so damaging that Ambassador Ron Kirk, the U.S. trade representative, complained that China was threatening American jobs.
The Obama administration cant have it both ways, claiming to save jobs when it pursues protectionism and griping about threatened jobs when competitors strike back.
This illustrates the weird logic of trade wars. A dispute that the Obama administration thought would involve only a subsector of the tire trade suddenly hurt American agriculture. Trade wars have a terrible tendency to spread through unrelated industries like a deadly contagion until they infect the whole economy.
[snip]