Obama’s Protectionist Trade Agenda Raises Americans’ Costs

Published February 23, 2010

When President Obama campaigned for the presidency in 2008 he made big promises to the American people regarding the economy and trade.

A few months after his election, in April 2009, he attended the G20 Financial Summit in London, where he told world leaders, “History shows us that when nations fail to cooperate, when they turn away from one another, when they turn inward, the price for our people only grows.”

How does Obama measure up to those words after the one-year mark of his presidency? Two words could summarize his trade stance: Staunch protectionist.

Examples of Obama’s protectionist proclivities abound. They include “Buy American” provisions in the economic “stimulus” bill passed in February 2009. In March the Mexican government accused Obama of violating the North American Free Trade Agreement when he and lawmakers denied funding for a pilot program that would have allowed commercial trucks from Mexico to operate in the United States.

Next came increased tariffs on Chinese-made tires. This raised prices on low-end tires, directly affecting people in the lower tax brackets whom Obama had promised to protect.

Kelsey Zahourek ([email protected]) is a federal affairs manager at Americans for Tax Reform.

A Year of Trade Actions in the Obama Administration
Day 13 – Feb. 1: The European Union warns the United States of serious ramifications, including an international trade war, if the President pursues a “Buy American Policy.”
Day 29 – February 17: Obama signs the “stimulus” bill and violates his transparency pledge that he would allow legislation to be posted online for five full days before signing it.

The “stimulus” bill includes “Buy American” protectionist language. U.S. cities and some states need not follow the rules of the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA).
“I agree that we can’t send a protectionist message,” Obama said in an interview earlier in the month.
Day 65 – March 25: Mexico retaliates in response to the U.S. violation of NAFTA in the “Omnibus Spending Bill,” by increasing tariffs on 90 U.S products. Obama had inserted a provision in the bill denying funding for a two-year-old pilot program that allowed some Mexican trucks to operate in the United States.
“We consider that the United States is mistaken, protectionist, and clearly violating the treaty,” stated Mexico’s Economy Secretary, Gerardo Ruiz Mateos.
Day 165 – July 3: World Bank President Robert B. Zoellick warns that protectionism could impede recovery from a global recession.

“It seems appealing in countries to buy their own national products.… Buy America. Buy Canada. Buy Chile. Buy China. But that’s the road to the problem that exacerbated the downturn in the 1930s and led to the Great Depression.”
Day 235 – September 11: Obama yet again breaks his campaign promise not to raise taxes when he announces the new tariff on Chinese tire imports. Americans for Tax Reform President Grover Norquist notes, “A tariff is nothing more than a tax on consumers.”

This tariff in particular hurts families earning less than $250,000 a year, because the tax applies primarily to lower-end tires.
Day 254 – September 30: Obama jumps in bed with labor unions when he humors the desire of the United Steelworkers and three domestic paper companies for more protection against makers of coated paper in China and Indonesia.
Day 277 – November 23: The Obama administration still struggles to pass the Colombia, Korea, and Panama Free Trade Agreements to open trade between the United States and these three countries. The AFL-CIO and other big labor organizations play a key role in lobbying the administration into halting progress on free trade.
Day 345 – December 30: In what we’re sure was a happy end-of-the-year surprise to ailing U.S. industries, another tariff was announced against Chinese steel imports.

Day 354 – January 8: An article published by the Reuters news service urges the Obama administration to hurry up and pass the Free Trade Agreements for the sake of the U.S. economy.
Day 357 – January 11: The World Trade Organization launches an investigation into Obama’s tariff on imported Chinese tires.

A WTO panel will be asked to evaluate whether the U.S. tariffs violate rules governing trade among the WTO’s 153 members.