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Wednesday, September 16, 2009

Tire tariffs show another cost of cap and trade: Free trade

Obama's tire tariffs, I argue in my column today, show how cap-and-trade is the enemy of free trade:
And cap and trade makes a trade war a political necessity, because the policy otherwise will ship U.S. jobs overseas. A trade war may cost jobs, but in a way less traceable to specific policies. In this way -- when U.S. politicians claim China is subsidizing its exports by not taxing emissions -- carbon caps could become a net short-term winner for manufacturing companies.
Cap-and-trade legislation may not stop the oceans' rise, as Obama has suggested. On the contrary, it may cause a rising tide of prices that lifts the fortunes of the well-connected companies, leaving American taxpayers and consumers drowning.

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