Defending the National Interest, or Giving in to Union Pressure?
The U.S. government responded to a surge of tire imports from China using Section 421 of the 1974 Trade Act. This allowed the U.S. government to impose a large increase in tariffs on imports of tires from China over a three-year period. Explanations for President Obama’s decision to do this ranged from domestic political explanations—specifically, that he was caving into pressure from the USWA union—to arguments that he was defending the larger national interests.
This case can be used in a course on Global Political Economy, Global Business Environment, Foreign Trade, or U.S. Foreign Economic Policy to illustrate—“safeguard”—provisions of U.S. trade policy, specifically in the context of U.S. membership in the WTO.