White House Continues Section 421 Misdirection

The White House defense of President Obama's late-night Section 421 announcement continues to rely on the "enforcement canard" - i.e., the incorrect assertion that the 421 decision was somehow part of the President's basic obligation to enforce US trade laws or global trade rules. For example, here's President Obama today in an interview with Bloomberg:

“We’ve got to establish credibility and enforcement of the rules precisely because I want to further expand trade,” Obama said. “And that is something that I think the Chinese government should understand.”

And Reuters reports that Obama continued his enforcement theme in an interview with CNBC: "If we don't enforce the rules that are contained in our trade agreements, then it's very hard to have credibility."

Orwellian rhetoric aside (exactly how does protectionism expand free trade?), you gotta give the President credit: he is masterfully sticking to the White House's approved "enforcement-credibility" talking points. Unfortunately, as I discussed on Friday night, the talking points are complete nonsense:

[L]et's also be very clear that... this decision also has nothing to do with "enforcing trade agreements" or enforcing US trade law. As I've said before, Section 421 provides the President with complete discretion under the law to disregard the recommendations of the ITC where "such relief is not in the national economic interest of the United States or, in extraordinary cases, that the taking of action pursuant to subsection (a) of this section would cause serious harm to the national security of the United States." See 19 U.S.C. 2457(k). "Not in the national economic interest" is then defined as where "taking of such action would have an adverse impact on the United States economy clearly greater than the benefits of such action." Id. There's plenty of evidence out there that these tariffs will not benefit American tire producers (who, again, didn't support the 421 relief) and would harm many more Americans - consumers, importers, tire merchants and automobile manufacturers - than were allegedly harmed by the surge in Chinese tires. However, even if one were to argue that the economic evidence is mixed on this issue, the express discretion provided under Section 421 means that a Presidential decision to reject the ITC recommendation is as much "enforcing" Section 421 as is a decision to impose the recommended relief. To claim that the President's action tonight denotes "stronger enforcement" of US trade agreements is therefore wholly misleading.

As if Presiden't Obama's version of the enforcement canard weren't bad enough, White House Press Secretary Robert Gibbs takes it to a whole new level in an impromptu press briefing today on Air Force One. When asked whether the tire tariffs might start a trade war with China, Gibbs was utterly dismissive. Indeed, according to Gibbs, the Administration had no choice but to effectively ban tire imports from the US market:

Look, again, I think it's important to back up and understand that if we're going to have a framework for global trade that works for everyone, then agreements are going to have to be enforced and rules are going to have to be followed. Without following those rules and following those agreements it's going to be hard to make trade work for everyone.

I think this administration obviously has invested a lot of time and resources in ensuring that trade happens throughout the world, that developing nations have the access to capital that they need to buy the goods and services that others are producing. But within that framework, again, we have to follow the rules.

Did you get that, folks? Don't blame the White House for the minor trade war. Their hands were tied. It was those pesky rules that made em do it! Well, that sneaky defense might just work if, you know, the text of the law didn't explicity reject such a theory. As my excerpt above demonstrates, Section 421 gives the President complete discretion to impose or reject trade protection. Indeed, President Bush rejected Section 421 relief each of the four times he was in Obama's position, and nobody could do anything about it. Literally. Thus, Gibbs' allegations of White House helplessness are completely and utterly false. (Sometimes I really wonder whether the politicos even check with the wonks before manufacturing this stuff.)

And finally, let's not forget the ultimate indicator of just how little the White House buys its own "enforcement" defenses: the 421 decision's timid Friday night news release. As I said that night:

[I]f... the President's decision to support the USW and effectively ban Chinese tire imports from the US market is a bold and important statement about enforcing trade laws in order to "maintain an open and free trading system," then why not release it first thing Monday morning? Or, better yet, why not do it mid-week as part of a strong statement on US trade policy in anticipation of the upcoming G20 summit? (The decision wasn't due until September 17th afterall.)

By now, I think we all know the answer to these simple questions and, by extension, the veracity of the administration's continuing claims re: "enforcement" of "the rules."

Unfortunately, I doubt they'll change their talking points anytime soon.