Tariffs or not? Ask the man with impeccable credentials

Bob Ulrich
Posted on August 14, 2009

You may have read about the "Rutgers professor" who has been referenced in stories and testimony about the Chinese tire imports debate.

He prepared a study for the American Coalition for Free Trade in Tires titled, "Estimated Economic Effects of the Proposed Import Tariff on Passenger Vehicle and Light Truck Tires from China."

Dr. Thomas Prusa is the author of the study. He is professor of economics at Rutgers University with a PhD in antidumping studies from Stanford University.

Although the United Steelworkers' claim that the tariffs would save jobs (translation: jobs held by union workers who produce the tires),  Prusa believes there will be a net loss in jobs nationwide.

"Workers in the tire distribution and installation sectors have every reason to be concerned about their future," he writes in the study. "The punitive tariff on Chinese tires would lead to a loss of at least 25,000 U.S. jobs.

"By contrast, the tire manufacturing industry will experience little to no job creation as a result of the tariff. Under the best case scenario, more than a dozen jobs will be lost for every job protected.  Under more realistic scenarios, the twenty-five or more jobs will be lost for every job protected."

Who is Prusa? He considers himself a trade economist whose main research interest is "contingent protection like antidumping, countervailing duty, and safeguards." He has been following China safeguards since 2001.

He also has written extensively on the trade impacts of antidumping protection. He may not have been familiar with the tire industry when he started his study, but, as an expert on the topic of protectionism, he was well qualified to proceed. And he knows a lot more about tires now.

"In this case, I got called after the ITC (International Trade Commision) had already made its 'market disruption' determination and had proposed the 55% tariff," he says. "I spent about a week reading both petitioner and respondent briefs, the ITC Staff report, and online materials such as MTD. At that point, I felt I understood the industry well enough to apply microeconomics to the situation and estimate the job benefits (to the tire workers) and also the losses to downstream workers."

In addition to his academic credentials, Prusa is a research associate of the National Bureau of Economic Research in Cambridge, Mass. He has lectured in conferences and seminars to the World Trade Organization, European Union, the World Bank, the Federal Reserve, the World Trade Institute, the CATO Institute, the American Enterprise Institute and the United Nations.

He may have been commissioned to research the effects of tariffs on Chinese consumer tire imports by tariff opponents, but his credentials give credibility to his findings.

Related Topics: Chinese imports, International Trade Commission, tariffs, Thomas Prusa

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