Obama Can't Win Fight With China: Today's Outrage
NEW YORK (
) -- President Obama picked a bad time to start a fight with China. Not that there's ever a good time for a battle with the nation that buys most of our national debt and supplies most of the inexpensive goods U.S. consumers crave.
Why are we so worried about U.S. tire makers, anyway? Let's face it: The tire industry ain't what it used to be. We're pretty much down to
Goodyear
(GT) - Get Report
and
Cooper
(CTB) - Get Report
.
I know the president is worried about jobs, with something like 5,000 positions lost in the U.S. tire industry over the past five years. But those jobs were being sent to cheaper production locations overseas with or without the influence of Chinese imports. A temporary tariff isn't going to suddenly change that trend.
Ask any economist and you'll be told that tariffs ultimately cost more jobs than they save. It's a global world, and free trade is the best way to raise the tide for all the ships.
The president seems to be letting his need to garner union support for his health care agenda dictate U.S. international policy. It's unfortunate that Obama feels the need to play this card. This tire tussle is bad for U.S. consumers and U.S. companies alike. This is just what we
don't
need as our economy begins to work out of the recession.
The Chinese are too important to trifle with, especially since they are financing our banking bailout and economic stimulus efforts by purchasing U.S. government debt.
We also have to bear in mind that U.S. companies need access to the Chinese market as badly as the Chinese want access to the U.S. market.
Chicken exporters and the U.S. auto industry may now find China closed to their products as retaliation. That's bad news for
Tyson Foods
(TSN) - Get Report
,
Ford
(F) - Get Report
,
Johnson Controls
(JCI) - Get Report
and a host of other U.S. companies.
Losing ground in China will also be bad for technology companies like
Intel
(INTC) - Get Report
and
Microsoft
(MSFT) - Get Report
as well as industrial groups like
General Electric
(GE) - Get Report
.
Let's hope that Obama is ready to back down under international pressure. Having made the grandstand gesture to show his support for the unions, he may get "points for trying" that will help his health care agenda without killing the recovery.
I hate to say it, but the U.S. can't win an economic war with China.
--Written by Glenn Hall in New York.
Glenn Hall is the New York-based Editor in Chief of
TheStreet.com
. Previously, he served as deputy editor and chief innovation officer at
The Orange County Register
and as a news manager at
Bloomberg News
in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at
The Journal-Gazette
in Fort Wayne, Ind. His work also has been published in a variety of newspapers including
The Wall Street Journal
,
The New York Times
and
International Herald Tribune
. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.
