Recently, trade disputes between China and the U.S. have grown in intensity. This is partially due to the global economic downturn. Countries are starting to look for ways to protect their domestic industries.

Earlier this month, in an effort to protect its domestic tire industry, the U.S. announced that it will impose tariffs on Chinese tire imports for the next 3 years: 35% for the 1st year, 30% for the 2nd year, and 25% for the 3rd year. However, this move may be more detrimental than helpful to the U.S. economy overall.

The United Steelworks Union claims that 5,000 jobs have been lost since 2004, due to the outsourcing of tire manufacturing. They claim that the new tariff would bring more jobs back to the U.S. It would be great if we can generate more jobs in the U.S. as a result of the tariff, but it is more likely that the tire manufacturers will just look to other countries to source their tires. The tariff is likely to help out Mexico more than the U.S. Additionally, as the tire prices increase, it is the American consumer that is hurt.

In a response to the U.S. tire tariffs, China has announced that it is looking into anti-dumping charges against U.S. imports of chicken products and auto parts. China also announced that it will extend anti-dumping duties of between 6% to 84% on U.S. imports of polyvinyl chloride (commonly known as PVC). The two countries are also involved in disputes over steel pipes, music and movies.

No matter what our opinion is on free trade, we can all agree that in this delicate economic climate, a trade war with China will not benefit anyone.