Bhagwati Weighs in on Chinese Tires; China Plays U.S. Politics

Last Tuesday, September 8, Professor Jagdish Bhagwati joined us here at NDN and the New Policy Institute to discuss the major international economic challenges facing us in the months since policymakers confronted the worst economic crisis in the modern era. I'll be posting segments of his talk with Globalization Initiative Chair Dr. Robert Shapiro over the next few days, but, in light of the growing U.S. – China trade spat, I wanted to begin with the part of the discussion focusing on rising powers and trade policy.

As you can hear at about 7:40, Bhagwati doesn't think the selective safeguard mechanism was particularly wise to include, but is sympathetic toward the President's desire to act on the provision agreed to by the Chinese. The Chinese retaliation, directed toward American the auto industry and chicken, is certainly unfortunate – hopefully the upcoming G-20 can smooth all this out and prevent a trade war – but it is certainly politically astute. It's hard to imagine a more politically sensitive industry right now than automobiles, and one might notice that the brand new chair of the Senate Agriculture Committee is from Arkansas, the home of Tyson Foods.