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Is The Obama Administration signaling a more protectionist trade policy?

Where does the Obama Administration stand on the issue of free trade? The president has repeatedly described himself as a free-trade proponent who wants to be a “better bargainer” on behalf of U.S. interests and wants agreements to include labor and environmental standards. But actions often speak louder than words. And there is some strong indication his administration may be moving to a more protectionist position.

During his campaign Candidate Obama harshly criticized The North American Free Trade Agreement saying “One million jobs have been lost because of NAFTA” and “I don’t think NAFTA has been good for America — and I never have.” American flag outside buildingHe later toned down those statements saying “Sometimes during campaigns the rhetoric gets overheated and amplified.”

Shortly after taking office, he got into a trade spat with Mexico over allowing Mexican truckers on American roads. Under NAFTA Mexican trucks were to be allowed on all American roads by the year 2000. However, Teamster Union complaints that Mexican trucks were not fit for the interstates stalled the program. Finally, both sides agreed on a pilot program to break the deadlock. In April, The Obama Administration tried to end the program and again ban all Mexican trucks from American roads. But after Mexico threatened retaliatory tariffs, the administration agreed to restart the program.

Now in its’ first major decision on trade policy, the administration is imposing stiff tariffs on Chinese Tires. He is using a law Congress passed in 2000 that allows the United States to impose tariffs, and other trade protections, if a surge in Chinese imports damages a U.S. industry. China agreed to the provision while negotiating to join the World Trade Organization. But until now, the general “safeguard” provisions of the law had never been invoked.

Several items indicate this may indeed be a change in US policy.

In the past, tariffs were levied to combat trade violations such as dumping. In this case no trade violations are alleged.  Four times the Bush Administration had been asked to utilize the “safeguard provisions” and had refused to do so.  What is the Obama Administration signaling with this action?

Especially troubling is the timing of the tariffs.  And this is taking place mere days before the G-20 summit to be held in Pittsburg. Is the administration signaling to other participants it’s unwillingness to support additional free trade agreements?

Let’s wait and see.