Safeguard Tariffs

A study from Peterson Institute for International Economics states that following the implementation of the tariffs, imports from china decreased from 1,631 thousand in the third quarter of 2009 to 643 thousand by quarter four that same year representing a 39% decline. While during that same period imports from other countries rose by 26% from 3 million to 3.7 million. Moreover, more recently data from the third quarter of 2011 shows that the number reached 42%. Its evident that the safeguard tariffs exerted a significant substitution effect on the quantity of US tire imports from China. In other words, foreign suppliers were replacing China as the major source of imports as U.S manufactures continued their business strategy of moving production
The tariff safe guards caused tire prices to more than double resulting in consumers to spending more on tires and less of their disposal income on retail goods. According to Gary Clyde Hufbauer and Sean Lowry of the Peterson Institute for International Economics there are roughly 3,507 retail sales jobs created in the United States for every one billion dollars spent in the domestic retail market. Furthermore, roughly 1,112 million is extracted from US consumers annually in result of the safeguards while at the same time Hufbauer and Lowry note the tariff put 48 million in the pocket of otherwise unemployed tire workers. Consequently, reducing consumer spending on retail goods by approximately 1,064 million indicating that this cost the american retail sector around 3,371 jobs. This information provided by Hufbauer and Lowry supports that US attempt to bring jobs were not successful in fact the 1,200 manufacturing jobs saved actually cost the American economy 2,531 jobs. Trade protection often takes more jobs from the retail sector than it saves in the manufacturing
The Chinese government strongly opposed trade protectionism used by the U.S and the U.S raising trade barriers only incentivised China to do the same. Hufbauer and Lowry report that on February 5, 2010, China announced its plan to impose antidumping tariffs ranging from 50.3 to 105.4 percent and countervailing duties between 4.0 and 30.3 percent on U.S and other foreign chicken part exports to China. As a result of the Chinese tariffs exports were reduced by $1 billion in conjunction with U.S poultry firms experiencing an 90 percent decrease in exports of chicken parts to China. The U.S risked angering their second largest trading parented at a time when it needed it the most.Moreover, the U.S forbidding domestic producers from outsourcing to China leaves U.S firms less competitive in the world market due to the fact that outsourcing provided firms the ability to take advantage of lower wages offered