No we can't? UK think tank says US power is fading

In the September 15, 2009 article "No we can't? UK think tank says US power is fading," Associated Press writer Raphael G. Satter reports:

LONDON – A weakened United States could start retreating from the world stage without help from its allies abroad, an international strategic affairs think tank said Tuesday.

The respected London-based International Institute for Strategic Studies said President Barack Obama will increasingly have to turn to others for help dealing with the world's problems — in part because he has no alternative.

"Domestically Obama may have campaigned on the theme 'yes we can'; internationally he may increasingly have to argue 'no we can't'," the institute said in its annual review of world affairs.

The report said the U.S. struggles against insurgent groups in Iraq and Afghanistan had exposed the limits of the country's military muscle, while the near-collapse of the world financial markets sapped the economic base on which that muscle relied.
The report also claimed that the U.S. had lost traction in its efforts to contain Iran's nuclear program and bring peace to the Middle East.

"Clearly the U.S. share of 'global power,' however measured, is in decline," the report said.

The head of another respected London think tank, Robin Niblett of Chatham House, said the rise in the relative power of China, India, Russia and the European Union has made it harder for the U.S. to exercise its influence.

"America should apply changes in leadership style, but I wouldn't overplay the decline because decline is relative," said Niblett — who was not involved in drawing up Tuesday's report. "One should not doubt that the U.S. remains the most powerful nation in the world, but it's difficult to use the power and to use it to influence others."

In addition to a rise in regional powers, Niblett said the U.S. has long been viewed as being part of the problem rather than the solution on many issues — including climate change, the financial crisis, and the failure of the Middle East peace process.
"It's also carrying the baggage of failed policies and of a failed financial approach," Niblett said, referring to the Bush administration. "There's a lot of catching up to be done."

The IISS report praised Obama, saying that he recognized there was only so much America could do "to impose its views on others."

After years of often thorny relationships between the U.S. and its allies during Bush's administration, Obama has talked of the need to work with other nations on such issues as the financial meltdown, climate change and nuclear proliferation.
"These are challenges that no single nation, no matter how powerful, can confront alone," Obama said in April after attending the G-20 summit in London.

"The United States must lead the way," he said. "But our best chance to solve these unprecedented problems comes from acting in concert with other nations."

The think tank's report said Obama could help restore the United States' standing by working with other nations to contain emerging threats to its position as the world's pre-eminent power. Controlling the nuclear ambitions of Iran and North Korea would require help from regional allies, the report said. The same was true of Afghanistan, where the U.S. has had difficulty persuading its NATO partners to follow its lead in boosting the number of troops sent to fight a resurgent Taliban.

"In the next year or two, the greatest demand on U.S. talents and power will be to persuade more to become like minded and adopt greater burdens," the report said.

Niblett said Obama was moving in the right direction.

"This administration is far more frank about the U.S. interdependence with rest of the world, and that's a good thing," Niblett said.
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Tariff on Tires to Cost Consumers

In the September 14, 2009 Wall Street Journal article "Tariff on Tires to Cost Consumers," Timothy Aeppel reports on a trade war between the U.S. and China in the market for tires:

Consumers who buy low-price Chinese tires — the bulk of the tires China exports to the U.S. — will be hit hardest by the new tariff, as shortages in this market segment cause retailers to scramble to find alternative sources in other countries.

The tariffs, which apply to all Chinese tires, will cut off much of the flow of the more than 46 million Chinese tires that came to the U.S. last year, nearly 17% of all tires sold in the country.

The low end of the market will feel the impact of the tariff most, as U.S. manufacturers, who joined the Chinese in opposing the tariffs, have said it isn't profitable to produce inexpensive tires in domestic plants.

"I think within the next 60 days you'll see some pretty significant price increases," said Jim Mayfield, president of Del-Nat Tire Corp. of Memphis, Tenn., a large importer and distributor of Chinese tires. He estimates prices for "entry-level" tires could increase 20% to 30%.

Low-end tires cost roughly $50 to $60 apiece, while premium tires can sell for $200 to $250.

It will take many months for producers in places like Indonesia and Brazil to pick up the slack. And any tire manufacturer that wants to get involved in the low-end business would have to revamp factory lines to produce the sizes and types of tires favored by U.S. consumers, a costly and complicated process.

There could also be shortages, Mr. Mayfield said, as existing supplies run low and importers have trouble finding alternative sources. Many importers stopped placing orders for Chinese tires several weeks ago, fearing they might end up ordering tires that would carry a hefty tariff by the time they arrived in U.S. ports.

The tariffs won't just hit Chinese producers. Both of the U.S.'s remaining domestic manufacturers — Goodyear Tire & Rubber Co. and Cooper Tire & Rubber Co. — make tires in China that they sell in the U.S. Cooper this year is on track to import 2.5 million tires that it made in China. It was planning to boost that to four million next year.

Most of the tires coming from China are sold under private-label names and little-known discount brands. Many of these tires are sold through large retailers and national auto chains.

While China mainly exports tires at the low end of the market, it does export tires at all price points, said Robert Purcell, chief executive officer of Purcell Tire & Rubber Co. in Potosi, Mo., which has 70 outlets selling retail and commercial tires. He said Chinese producers appear to be steadily moving toward selling higher-price tires as they and foreign companies invest in new technology in China.

Rod Lache, an industry analyst at Deutsche Bank Securities, said the tariff is hitting at a difficult moment, which could compound turbulence in the marketplace. Inventories are low, he said, as companies have reduced stocks in the face of the recession.

Meanwhile, a massive reduction in capacity is taking place. In 2005, North America had the capacity to produce 370 million tires. Today, that number has been cut by more than 40 million — and a further 35 million are in the process of being eliminated.

"And now demand is starting to creep back up," Mr. Lache said.

Write to Timothy Aeppel at timothy.aeppel@wsj.com

Mercantilism

The main goal of mercantilism was to increase the money in a country’s treasury by creating a favorable balance of trade. A country had a favorable balance of trade if it had more exports than imports. Colonies helped a country have the goods to maintain a favorable balance of trade. For example, say Spain sold $500 in sugar to France, and France sold $300 in cloth to Spain. France would also have to pay Spain $200 worth of precious metals to pay for all the sugar. Spain would then have a favorable balance of trade because the value of its exports (sugar) was greater than the value of its imports (cloth). Spain would become richer because of the precious metals it received from France.


Colonies helped nations grow rich in several ways. Colonies provided various raw materials as well as mines that produced gold and silver. In addition, colonies served as markets for goods made in the home country.

Source: http://mrthompson.org/text/2-1%20Spain%20Claims%20an%20Empire.htm