No one likes to hear “I told you so,” but sometimes it is unavoidable. Earlier this month, ATR warned of a new wave of protectionism in the wake of President Obama’s tariff on Chinese tires. The Wall Street Journal reports that those fears may soon be realized. Several unions and industry representatives have already asked the government for new protectionist duties. Now the paper industry is the most recent sector to jump on the tariff train.
Alleging that the governments of China and Indonesia are unfairly subsidizing their domestic paper industries, the United Steelworkers and three paper companies have filed anti-dumping claims. If they get their way, the Obama Administration would impose duties to raise prices on a wide range of paper products, especially the coated paper used in advertisements and magazines. The United Steelworkers were the chief beneficiary of the tire tariff and now seem poised to strike another blow to American consumers over paper.
While the President has spoken publicly against protectionist measures, his actions send startlingly different message. Amid the hubbub surrounding the G-20 summit in Pittsburgh, the White House claimed that “the U.S. remains firmly committed to free trade and resisting protectionism.” That may sound reassuring, but considering that the administration has already created barriers to Chinese tires, Mexican trucks, and stalled trade agreements with South Korea, Colombia, and Panama, the words seem nothing if not hollow.
President Obama’s trade policy has shown that he enjoys a close relationship with unions like the United Steel workers, to the detriment of the American taxpayer. As the Wall Street Journal says, “This might be good union politics for the Administration, but it’s bad economics for Americans. If imposed, the duties will foist higher prices on U.S. businesses just as America tries to dig out of a recession.” Protectionism breeds more protectionism. If recent history is any indication, this problem is going to keep getting worse.