Today around 2pm, news broke that Sens. “Smoot” Schumer (D-NY) and “Hawley” Graham (R-SC) gave up for now on their China bashing tariff of 27.5 percent. This is a very good thing indeed.
Placing a huge tariff barrier between American and Chinese trade would have the same effect as imposing a large tax on the consumers, businesses and investors of both countries. It would completely disrupt economic growth worldwide.
Treasury Secretary Henry Paulson deserves credit for getting this delay and preventing a vote in the Senate that surely would have passed with very bad economic symbolism.
Fortunately, there is no similar tariff bill in the House. Chuck Schumer and Lindsey Graham apparently will now work through the Senate Finance Committee where Chairman Chuck Grassley (R-IA) is generally opposed.
China is far from our best friend in world affairs, but the widening economic links between our two countries is a definite plus for prosperity as well as diplomacy.