July 3, 2009

The Coming Trade War with China

Gordon Chang, Forbes

AP Photo

This Monday, the U.S. International Trade Commission, in a 4-2 vote, recommended the imposition of punitive duties on Chinese-made tires. This "Section 421" case now goes to the desk of President Obama. If he gives his OK and the special duties go into effect, some foresee a trade war with China. One analyst, Daniel Ikenson of the Cato Institute in Washington, called the case "High Noon for U.S. Trade Policy."

Perhaps the confrontation will not be that dramatic--the free-trade community often employs dramatic images in its warnings--but the decision will be consequential nonetheless. For one thing, President Bush turned down all four Section 421 cases sent to him by the Commission. Obama's acceptance of the panel's decision, therefore, would mark a change in American trade...

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