Retaliatory Measures by China?

Yesterday I posted an entry about the imposition of additional U.S. tariffs on imports of Chinese tires; a policy encouraged by the huge labor union, the A.F.L.-C.I.O. A Wall Street Journal article published today, UPDATE: China: Investigating US Auto, Chicken Product Imports, indicates the fallout from that decision by the Obama administration is already manifesting itself. In an obvious retaliatory move the Chinese have "singled out U.S. automotive and poultry product imports for investigation."

This could be the start of a domino effect where one tariff leads to another. World trade and prosperity suffer as strong and efficient enterprises are made to pay the price for the protection of weaker and more inefficient ones. Let's hope this stops here and that cooler heads prevail. The root problem seems to be the feeling by the White House that the interests of a powerful supporter- big labor- must be advanced as some sort of quid pro quo. There are larger economic concerns however which include the well being of the economy as a whole. Also of concern is our relationship with China which has become an important trading partner as well as a key investor in the United States. The American business community should keep an eye on this and pressure politicians to pursue a prudent economic course of action.