Business Case Studies & Business Publications

Tariffs on Tires (A)

Debaere, Peter, Le...

Case

Tariffs on Tires (A)

Debaere, Peter; Lee, Joonhyung

GEM-0159 | Published July 31, 2018 | 11 pages Case

Collection: Darden School of Business

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In September 2009, President Barack Obama announced a hefty tariff on low-cost automobile and light truck tires imported from China. Earlier that year, the United Steelworkers of America, which represented workers in many US tire production plants, had filed for protection under Section 421 (the "China safeguard") of the US Trade Act of 1974. Supporters of the decision saw the tariff on Chinese tires as an extension of the president's efforts to enhance the enforcement of trade laws, the position Obama had adopted time and again as a candidate in 2007. Could the tire safeguard provide a template for how policymakers could protect American workers?

Understand the impact of tariffs on production and imports. Introduce or explore a standard welfare analysis. Explore why countries still employ protectionist measures, when they have been demonstrated to have adverse effects on the country. Discuss links between trade policy and employment. Examine the implications of antidumping measures and other bilateral international trade instruments. Understand the importance of particular context in trade decisions.