Because the last time the administration got involved in the car space the results were so positive (for the unions if not so much for creditors), it appears we may be approaching another episode where central planning will make the decisions in the US auto space. Only this time instead of creditors, the impaired party will be China. Reuters reports: "Midwestern U.S. lawmakers and union groups on Tuesday urged President Barack Obama to restrict imports of auto parts from China that they said benefited from massive illegal subsidies and threatened hundreds of thousands of American jobs. "We need to stand up to the bully on the block," U.S. Senator Debbie Stabenow, a Michigan Democrat, said, referring to Beijing. "The bully on the block continues to take our lunch money and we need to stop that," she said." Odd - China was not complaining when the Obama administration was providing massive subsidies (whether or not illegal remains to be seen - surely Holder is all over it) to the solar and other "green" industries. In other words, just like Solyndra and Ener1, who are merely the first of many artificially subsidized entities, provided such great if highly transitory results for US employment, let's recreate the experiment at the wholesale level, by implicit subsidies and while also angering America's biggest creditor. Something tells us this proposal has a definite probability of passing. In the meantime, central planning for everyone.
More on this brilliant foray into trade wars:
The push for the administration to bring a possible case at the World Trade Organization or begin a U.S. Commerce Department investigation that could lead to duties on Chinese-made auto parts came one week after Obama said he was creating a new Trade Enforcement Unit to crack down on unfair foreign trade practices in China and other countries around the world.
It could create further strains in the U.S.-China relationship as Obama is preparing to host Chinese Vice President Xi Jinping, who is expected to be China's next leader, a the White House on Feb. 14.
"We must be aggressive on trade enforcement - especially as China ramps up subsidies in strategic industries like auto parts, said Senator Sherrod Brown, an Ohio Democrat.
"Today, we're providing the president with his first opportunity to deliver on the promise to guarantee a level playing field," said Scott Paul, president of the American Alliance for Manufacturing, whose members include the United Steelworkers union and steel companies.
The groups released studies prepared by the labor-backed Economic Policy Institute and the Stewart and Stewart law firm that cataloged Chinese government subsidies and practices that they said violated WTO rules and threatened jobs at many small- and medium-sized U.S. auto parts manufacturers.
"If these policies are not stopped, by the end of the decade China could seize 50 percent or more of our auto parts market, costing hundreds of thousands of American jobs," said Terrence Stewart, Stewart and Stewart's managing partner, which specializes in cases against allegedly unfair imports.
Last year, the United States ran a deficit of nearly $10 billion in auto parts trade with China.
Here's a thought: perhaps the US would run a surplus if it provided quality pieces at affordable prices that could compete with China-made products? As for the idiocty of the remainder, we will just watch it crash and burn as it is enacted, and has dire consequences on every other part of the global economy, as these same trade unions finally realize that Chimerica are actually joined at the hip, and that what is worse for China is n-fold worse for the US.