Has a trade war been averted or merely postponed?

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The other day I blogged about my concerns that the Ghosts of Smoot & Hawley had risen. I feared the commencement of a trade war in which New Zealand would suffer. Therefore, it was with some relief that I read in a Times article today:-

Last night Mr Obama gave a strong signal that he would remove the most provocative passages from the Bill.

“I agree that we can’t send a protectionist message,” he said in an interview with Fox TV. “I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.”

What does concern me though is that it would appear that it was not until the EU threatened retaliatory measures that the Obama White House appeared to have recognized the problem. Has a trade war been averted or merely postponed?

I am left wondering:

a) did the Obama team think that we would not notice?
b) did the Obama team let this go in, with the intent of then pulling it – but claiming it was due to the need to accommodate allies?
c) was it all a smokescreen to insert watered down wording that is still protectionist in nature?
d) was it incompetence and/or arrogant naivety?


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