“Obama administration passes legislation raising the price of tires 35%, the additional cost to feed the federal coffers”. That extra money will be taken right out of our pockets and put right into the general fund.
Ok. That’s just bizarre. Really huge multinational corporates trot around the globe using the hell out of cheap, desperate labor. Those who are able to best exploit cheap desperate labor can charge the lowest prices and at the same time make it hard for companies using US labor to compete. So the state sets a policy to make US made products more cost competitive, and this is now just some “scheme” to steal from you?
Think of it this way instead. This results in an extra tax (the tariff) that you will pay if you want your tires from China. If instead you buy other tires, then your money is not going to pay the tariff, it is going to help put food on the table of some hard working tire worker closer to home.
I’m not even advocating either kind of thing.
But an import tariff is not some general federal tax - in fact, if no one in the US ever buys another tire from China, then not once cent of it is paid.
“… it is going to help put food on the table of some hard working tire worker closer to home.”
Like Japan, or Korea, or Italy, or even China since Cooper and perhaps others manufacture tires in China that aren’t covered by this edict. Yes, American manufacturers like Goodyear and Michelin will benefit, too.
Bizarre? Who exactly do you think will pay that tariff? You and I will.
And where do you think the money will go? Straight to the feds.
I just bought new tires for a total cost of $525 for four. If that tariff were in force I would have paid just over $708. And the tariff part of that cost would have gone straight from me to the manufacturer (to cover the cost of the tariff) and straight from there to the feds and into the general fund.
It’s a federal tax, made to appear as if it’s to help the citizenry. But how would raising the price of my tires from $525 to $708 dolllars have helped me?
If we could produce tires at a competitive price, without artificially raising the price of the competitiion through a tariff, then we would…but we can’t. So how do we compete globally? We can’t. And what happens if China imposes import taxes on us? What does that do to China as a market for our products? It dessimates it.
Think about that.
Protectionist tariffs are not advantageous for a country that needs global markets.
The point I was making is that you’re talking about it like it is a general tax on tires. It isn’t a general tax on tires. It is a tax on tires imported from China. So you would have paid extra because of this ONLY IF you bought tires imported from China. If you bought tires made elsewhere then you wouldn’t pay any extra tax at all. You might have paid more for the tires, but then it is going to the company, part of which goes to pay the wages of its workers - not to the feds.
As far as protectionism goes, its just not such a simple matter. I actually have no dogmatic position about that because it is pretty clear that there are ups and downs either way. To purely support it or condemn it is to completely ignore the pitfalls of one route while ignoring the benefits of another.
And, when I think about whether or not something will be good or bad for the citizenry I am not thinking about what is best for little old me and the size of my pocketbook on this very day. It is quite possible that the citizenry would be much better off in many ways if we did have to pay more for certain things. I’ve never thought of getting whatever I want at the cheapest possible price as a civic virtue.
You’re right in that it currently only applies to tires imported from China. However by using distribution companies in other countries China will easily get around it.
WE are the citizenry. And very fortunate ones in that we can afford tires. Many no longer can. Since so many budget priced tires are imported, that’ll make iti more difficult for them. It isn’t just about me, it’s about what’s good for all of us. If it hurts me, it likely hurts other working class people as well.
NH alone has lost 8,000 more manufacturing jobs in the past year, and the losses continue. The automotive industry, both the manufacturing and the sales portions, is flat on its back. The financial community has suffered devestating losses. The housing industry is still struggling to get up again. Unemployment is at record levels nationwide. Many states are bankrupt. Many more are trying to find ways to keep from going bankrupt, including new taxes, new fees, cutting services, and postponing needed highway repairs. The credit card industry is reducing its caps, cancelling credit cards, and increasing rates and fees. The deficit is now $1.9 trillion. It’s not a good time to be adding surcharges to importers of inexpensive necessary consumer goods, tires among them. It hurts us, the people, and many cannot afford this added cost.
Meddling in the freemarket by the feds has had disaterous consequences time and time again. Now more than ever it has global recurcussions.
I’ll have to respectfully disagree with those who claim it’s a step in the right direction.
“Meddling in the freemarket by the feds has had disaterous consequences time and time again. Now more than ever it has global recurcussions.”
And not meddling had disastrous consequences, too. We’re still under the pall of the banking crisis that could have been avoided by some control of the markets. Total control won’t work, but some is needed to stop wild swings. And as to tires, it is hypothetically possible that a foreign government could underwrite production to put outside production of the same commodity out of business and consider it an investment in the future. Is that fair trade?
“China” can’t provide ANYTHING. Enforced slave labor in China CAN build you a cheap car. Is that what you really want? A Communist country that uses troops to ensure labor “peace” for the foreign corporations who exploit it??? You call that “Free Trade”?? Then, when they REALLY get mad and hijack airliners and fly them into buildings and we call them “terrorists”, like we were INNOCENT in all this??
Gee, I thought they LIKED working for $1/day…How dare they attack us, they should be grateful for the jobs we give them, right?
Yes, we do need regulations to protect us, but in my view tariffs on CHinese Tires are not protective regulations. They’re driven by international politics. And rather than protect us from exploitation they raise prices overall.
The banking crisis began in the housing financial sector due to too much toxic paper. Toxic paper began with the Feds requiring the financial institutions to come up with creative financing to allow those who could not qualify for mortgages using traditional fixed rates to buy homes, and relaxing regulations to allow them to do so. Had the feds not meddled in the private sector this severe recession might not have happened.
We’re simply of different philosophies on this issue.
“I just bought new tires for a total cost of $525 for four. If that tariff were in force I would have paid just over $708.”
You paid $525 for four Chinese tires??? HAHAHAHAHEEEEEEOOOOOEEEEeeee…Good-Ride Tires…How you like Yankee-boy??
Claiming that all tire prices will jump by $35 each is hogwash. Not even the tires directly affected will jump by that amount. Tire prices are not going up. It’s the value of your money that’s going DOWN…
“Toxic paper began with the Feds requiring the financial institutions to come up with creative financing to allow those who could not qualify for mortgages using traditional fixed rates to buy homes, and relaxing regulations to allow them to do so.”
It was much, much bigger than that. The industry suffered from believing that housing prices would go up forever, and therefore believed that risky loans were not a risk. They gave people no-principal loans to get the price down. They gave little-to-no money down loans since housing value could not decrease. Most of those people qualified for loans, but qualified for bigger loans with the relaxed requirements. And the Government did not require the mortgage banks to loan money to the poor people that previously did not qualify. Individual legislators like Frank and Pelosi strongly encouraged them to do so. But that is not a requirement, and it didn’t take much to convince them to start. If those are the people you mean when you say “Government”, fine. But I usually think of the regulators, not the legislators.
Yes, bscar, Obama is biting the hand that feeds us, but I think that is true even if you ignore the fact that China is financing our debt. That sad fact is that protectionist policies will drive down our standard of living when things become more expensive.
Personally, I don’t know anyone who would be willing to put Chinese tires on their vehicles after they poisoned our pets and our children with substandard products. The invisible hand of the free market was already hurting the Chinese tire market, making this unnecessary.
You’re right it’s much bigger. Like most things financial, it’s complicated. Way too big to visit all the facets here. Entire books have been written about it. Big books. I simplfied.
The creative financing schemes driven by the Consumer Reinvestment Act, combined with deregulation of the industry to enable greater creativity in financing, created the foudation for toxic loans, combined with the pent-up demand of the last wave of boomers entering the housing market after the period in the '70’s when unemployment, inflation, and interest rates were all double-digit and they postponed their buying, created the demand and the spike of home sales. That drew prices artificially high and drove building of excess capacity. It also created enormous risk taking in (and profiteering from) the housing market. When that wave of boomers went through, the volume of building left excess inventor. Prices dropped. After value drops in the secondary market, “Bundling” loans helped keep viable what could not be resold by themselves. The whole thing spiralled out of control.
I also didn’t mention that the initial mandate to create creative financing was in large part caused by the prohibition of “redlined” zones. Prior to the CRA, there were areas wherein you could not get a loan no matter how much money you made. This was, in fact, discriminatory.
But the bottom line is that it began with the CRA and the creative financing. The CRA was legislative, but the regulators clearly added to the problem immensely.
If you really believe that buyers of Chinese tires won’t pay 100% of the cost, and if you really believe that once their “bottom end” prices are artificially raised by the tax their competitors not affected by the tax won’t raise theirs, then I admire your rose colored look at the world.
The hogwash is believing that this tax will benefit us economically.
The hogwash is believing it’ll create manufacturing jobs in the US rather than simply raise the price of tires.
The hogwash is believing that the consumers of Chinese tires won’t pay 100% of the tax, simply as an added cost to the price they pay.
Yankee-boy like his new tires. Thanks you for asking.
Yankee-boy also likes the price he paid…much better than the price he’d have had to pay if he’d wanted until after the tax went into effect. And a decent price for ultra high performance 45 aspect ratio all-season tires in a 215 millimeter section width mounted and balanced. Oh, and I have a $115 rebate on its way to my house. How much should I have paid?
Yankee-boy is happy. May you enjoy your philosophy of using taxes to control peoples’ buying behaviors. Yankee-boy is happy he got in “under the wire” on this one. Yankee-boy not have lots of excess money hanging around.
You are so right, waterboy. I still like Sumitomo, but, though they are made in Japan, which is known for making a lot of quality stuff, they are sold in America, by Americans, for Americans… and some illegals, too. And, slapping tarriffs on things doesn’t help consumers - only the govts that do it. Personally, I’d be afraid to use Chinese tires on my cars, whether my reg vehicles or my IM speeder.