President Obama tried to bury news about implementing restrictions on Chinese tyre imports, but the recently-announced tariff has already triggered losses in the United States, threats of retaliation from China, and worst of all, invited other protectionist to state their case for more trade barriers against Chinese and other imports.  This Wall Street Journal article explains both the immediate and long-term threats caused by President Obama's executive order to harm the American and Chinese economies.

The harm to the US tyre industry:

Although many of the implications of this tariff have yet to surface, business owners and analysts say the $1.7 billion U.S. tire industry will contract further. "Job losses may result, and, over time, some of the favorable [production] economies might become less favorable," says Larry Harding, the president of High Street Partners, an international business advisory firm in Annapolis, Md.

The tariff will cut the U.S.'s intake of Chinese tires by two thirds, according to research conducted by Thomas J. Prusa, an economics professor at Rutgers University. To fill the void, manufacturers will look to other developing economies. Prusa estimates such a move will take 12 to 18 months, which could leave tires in short supply.

Although the tariff was designed to save U.S. jobs, Prusa's research suggests that the opposite will occur. For every U.S. tire job saved by the tariff, 20 jobs downstream in related tire industries will be lost, he says. Not only will there likely be a shortage of tires over the next 12 months, but many tire sellers will raise prices to help pay for the tariff. "We will see about 20 million fewer tires sold in the next 12 months," Prusa says.

Many dealers fear a drop-off in demand. "People have been putting off the purchase of tires anyway," says Bill Trimarco, the CEO of Hercules Tire & Rubber, a private-label tire supply company in Findlay, Ohio. "When the price of tires goes up, [fewer] tires will be sold."

Still, after getting socked with a $325,000 bill per the new tariff earlier this week, Trimarco says the company was forced to raise prices 10% to 15% on Chinese tires. "This is an anti-small business policy. A company like Goodyear won't get hit, but a lot of small businesses will be hard hit," he says.

And the threat that tariffs on tyres will pave the way for other harmful policies:

The safeguard provision may be used only against China and only until 2013 (the first 12 years of China's WTO membership). However, businesses and advocates say the government's invocation of the statute amounts to a startling precedent that could set the stage for more tariffs. Now, many small firms — which were more vulnerable to the downturn than larger companies — are worried about getting caught in the middle of a potential trade war between the U.S. and China.

"The significance of this case can't be understated," says John Donohue, a partner in the International Trade Practice group at Thorp Reed & Armstrong in Philadelphia.

Thanks to the precedent set by this tire tariff, any company that imports Chinese products now faces a real threat of future import taxes, says Erin Ennis, vice president of the U.S.-China Business Council, a trade group in Washington, D.C. "I don't think you can assume that all cases will go forward and that tariffs will go into place, but given that this is what happened under the first 421 case, it's safe to say that more cases are likely," she says.

Already, Beijing has opened up probes into imports from U.S. poultry products and auto parts companies. China may also file grievances with the WTO. Depending on how the international trade regulator rules, China could enact equally heavy tariffs against the U.S., Donohue says.