American Tire Tariffs against China: What We can Learn from Poor Policy

Charles A.  Rarick

doi:10.18034/ajtp.v3i3.406

Authors

Charles A. Rarick Purdue University Northwest

DOI:

https://doi.org/10.18034/ajtp.v3i3.406

Keywords:

Tariffs, trade theory, American trade policy, China

Abstract

Facing a significant decline in domestic tire manufacturing jobs, President Obama imposed tariffs on tires made in China for a three year period beginning in 2009. With domestic employment in the tire manufacturing industry in decline and Chinese tire imports rapidly rising, President Obama yielded to industry pressure. The tariffs significantly decreased the sale of Chinese made tires, however, tires made in other countries such as Mexico, Indonesia and Thailand rose as Chinese tires became more expensive. This paper explores the effectiveness of this trade policy and proposes there are lessons to be learned when pondering further such protectionist trade policies.

JEL Classifications Code: F13

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Author Biography

Charles A. Rarick , Purdue University Northwest

Professor of International Business, College of Business, Purdue University Northwest, Hammond, IN 46323, USA

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