We are leaving step by step the Great Depression: Crash, followed by money printing, destruction of productive goods (cash for clunkers), and now, tariffs:
BEIJING (Reuters) — China on Saturday denounced a decision by the United States to impose a 35 percent tariff on Chinese-made tires, saying that the move sent a dangerous signal before a Group of 20 summit meeting and could set off a global chain reaction of protectionist measures.This is probably just the beginning, the foot in the door for more tariffs of all kind (as usual...).
A White House spokesman said the decision on Friday was “to remedy the clear disruption to the U.S. tire industry” from cheap Chinese imports.
In a statement issued on his ministry’s Web site, China’s minister of commerce, Chen Deming, called President Obama’s decision “a grave act of trade protectionism” that violated rules set by the World Trade Organization.
The Chinese Ministry of Commerce spokesman, Yao Jian, said the move could set off a “chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy,” according to the ministry Web site.
And yet again, Chinese 'communists' are the voice of reason where American 'capitalists' are doing the exact things that Marx would recommend.
Update on 2009-09-14: Mish writes:
To date, Obama is repeating the same mistakes Roosevelt and Hoover made during the Great Depression. Cash-For-Clunkers was a horrid policy decision that led to the destruction of productive assets much the same as Roosevelt's policy of illegally burning crops hoping to force up prices. See Government Bailouts and the Stock Market - The Seen and the Unseen for more details.
Now, Obama's tire and steel tariffs will strongly encourage more unions and labor groups to seek relief under "Section 421" of U.S. trade law. That misguided law does not require petitioners to prove unfair trade practices.
If Obama keeps this foolishness up, which right now seems highly likely, he risks a global trade war similar to the global trade crash kicked off by the Smoot-Hawley Tariff Act signed by President Hoover in the early stages of Great Depression.