Tire tariff tiff

So the United States and China are going to war. Well, a trade war ... a little one. President Obama ticked the Chinese off rather severely it seems by imposing a 35 per cent tariff, on top of an existing four per cent duty, on tires from China. The tariff was in response to a surge in Chinese tire imports and pressure from the United Steelworkers Union.

The union's concern is understandable. From 2004 to 2008, U.S. imports of Chinese tires more than tripled and China's market share in the U.S. increased from 4.7 percent to 16.7 percent. Four American tire plants closed in 2006 and 2007 and three more are closing this year with just one new plant opening. The Steelworkers claim 5,000 American jobs have been lost as a result.

The U.S. tire companies, on the other hand, are not complaining and don't support the tariff. And why would they? They have been busy shifting their production from the U.S. to countries such as China to save on labour costs. Their factories in China will be subject to the tariff if they export products to the U.S.

Meanwhile, the Chinese are retaliating with a complaint to the World Trade Organization and an "anti-dumping and anti-subsidy" investigation into imports of U.S. vehicles and chicken products. China claims to be "consistently and resolutely" opposed to protectionism, yet its market advantage depends heavily on a workforce denied the basic freedoms of association and speech, a work force that cannot organize itself to protect and promote its interests. This coerced labour, which reduces Chinese workers to little better than serfs, certainly serves to protect Chinese export advantage, but is not precluded under trade rules.

The contrast in views between American workers and their companies illustrates what global trade agreements are all about. Touted as mechanisms for free trade, they are really mechanisms for cheap labour for corporations. Global trade is in no small way a continuation of the old struggle between capital and labour brought to the world stage.

The world frets that the dispute will slow economic recovery from the recession. The world should instead fret about "free" trade agreements that insist on freedom for corporations but not for workers. It is a perverse system that punishes a country for a tariff but has nothing to say to a country that ruthlessly exploits it work force, even though both are clearly protective measures as well as hindrances to any meaningful concept of free trade.

This time workers are fighting back and, surprisingly, their country's leader has supported them. I wish them and their president the best of luck.