By Ian Swanson - 09/14/09 04:30 PM EDT
Pro-trade Democrats in Congress say the Obama administration’s decision to impose punishing tariffs on Chinese tires could actually open up trade.
The decision has provoked a furious response from China, and Republicans and business groups have blasted the president for bowing to demands from labor.
Obama imposed the tariffs, set to be in place for three years beginning at a rate of 35 percent, in response to a petition filed by the United Steelworkers union. The quasi-judicial International Trade Commission, which first reviewed the petition, had recommended the president impose even higher tariffs.
But Democrats who have supported trade agreements in the past are casting the decision as a confidence-builder for U.S. industries and workers, one that shows the government will use trade laws when necessary to protect them. They argue such steps in the long run will increase public confidence in trade, which has dropped significantly over the past decade even as Congress has approved a series of free-trade agreements.
Rep. Joseph Crowley (N.Y.), the leader of the pro-trade New Democrat Coalition, noted that the safeguard law that Obama used to impose tariffs on Chinese tires was set up by Congress to protect domestic industries from surges in Chinese imports.
The safeguard was included in legislation passed by Congress and signed into law by President Bill Clinton in 2000 that granted China permanent normal trade relations and paved the way for that country to enter the WTO. It was included to get more lawmakers in Congress to support China’s entry into the global trading system, Crowley said in an interview.
He said it was important for members of Congress to see “we’re enforcing laws that are put in place.”
Sen. Max Baucus (D-Mont.), who helped shepherd several trade agreements through the Senate Finance Committee during the George W. Bush administration, also has long called for the administration to more strongly enforce U.S. trade laws.
By imposing the tariffs on Chinese tires, Baucus said Obama had sent a signal to American farmers, ranchers and workers that “he will defend their rights under our international trade agreements.”
In a statement released Friday night, Baucus also noted that the Bush administration rejected four petitions under the China safeguard. Obama’s decision marks the first time the relief has been granted.
Crowley said it is important that Congress and the administration do more to have “a broad discussion” on trade that could also include pro-trade policies. He said the New Democrat Coalition stands willing to work with the administration on that effort.
China stepped up its complaints by asking the U.S. for formal discussions about the decision at the WTO. The request triggers a process in which the two sides are to try to settle their differences without a trade case. If they are unable to do so, China could request that the WTO set up a panel to look at the matter.
China’s official news agency quoted China Minister of Commerce Chen Deming saying the U.S. decision violated WTO rules and failed to honor U.S. commitments made at a G-20 summit earlier this year to avoid protectionism.
Republicans have ripped the White House for bowing to pressure from a special interest group amid a downturn in the economy. Rep. Kevin Brady (R-Texas) said the president has imposed a new-tire tax on working Americans, “many who can barely afford to replace a tire as it is.”
More generally, business groups and GOP lawmakers have been frustrated that the administration has done nothing to move trade agreements with Colombia, Panama and South Korea that were held over from the Bush administration.
All of those deals are opposed by organized labor and divide Democrats in Congress. The administration is widely seen as taking a go-slow approach on the deals, particularly as it works to get Congress to approve its ambitious legislative proposals on healthcare reform and climate change.