It’s depressingly common. First-term presidents often resort to a quick-fix tariff or import quota to shore up political support in the early going, as Obama has done by granting the United Steel Workers union the tire tariff it requested. As other commentators have pointed out, Bush imposed tariffs on imported steel early in his first term, but he ditched the steel tariffs down the road when they became more of a political liability than an asset.
Does that mean we shouldn’t be worried? That we should chalk up the tire tariffs to the usual first-term protectionism? In a word, no. Bush’s early protectionism was harmful, but it arguably bought him the political capital he needed to pursue a free-trade agenda later on, as noted in a piece I wrote for the home page:
President Bush’s advisers cast his early protectionist moves as bargaining chips in an effort to pursue a larger free-trade agenda. In addition to helping him get re-elected, they said, the moves were crucial in getting Congress to give him fast-track negotiating authority — the power to submit trade agreements to Congress for a simple up-or-down vote.
The Bush administration used fast-track to negotiate free-trade agreements with Australia, Bahrain, Oman, Morocco, Chile, Singapore, and Peru, as well as the Central American Free Trade Agreement (CAFTA). It also vigorously pursued the Doha round of world trade talks and negotiated pending agreements with Panama, South Korea, and Colombia. Despite early protectionist moves, Bush turned out to be a believer in free trade. What inferences can we draw from Obama’s early protectionism? A look at the recent history of his party indicates that the news isn’t good.
Daniel Drezner is also thinking along these lines. “With the Obama administration,” he writes, “this feels like the tip of the iceberg. Most of Obama’s core constituencies want greater levels of trade protection for one reason (improving labor standards) or another (protecting union jobs). This isn’t going to stop.”
Meanwhile, Brad DeLong provides a dose of common sense from the left.