The Obama administration has announced that it is imposing tariffs on Chinese tire imports. The three-year plan will be have 35% tariffs the first year, 30% tariffs the second year, and 25% tariffs the third year.

This is good news for U.S. tire manufacturers and bad news for Chinese tire makers. American consumers will pay more for tires over the next three years than they would if they could buy cheap Chinese tires, but it will be a benefit for U.S. big labor and domestic tire makers as their products will be more competitive.

The S&P 500 closed today at 1530.23, a new all-time closing high. The S&P 500 had been flirting with a new high these past 10 days, but now it is done and official. So, what does all this signify? Where do we go from here?

The United States stock markets have proven to be resilient and strong so far in 2007. The first quarter saw general corporate earnings to be quite healthy and, even more important, sustainable for the remainder of the year. The market was knocked -- before it even opened -- this morning by the news out of China. The government of China, trying to cool off the wild ride its market has provided this year, introduced a higher transaction tax. The government raised the rate from 0.1% to 0.3%. The Chinese market took a hit, but appears ready to plow right back through the pre-tax announcement.

The US market, and the S&P 500 specifically, is not generally viewed as "expensive." With the S&P 500 trading at 16 times 2007 expected earnings, the consensus is the market is fairly priced -- not over-priced. Coupled with strong corporate earnings experienced the first quarter, investors are feeling and showing confidence in the US economy. After all the stock market is the voice of near term confidence -- or lack of it.

The private equity world is keeping investors interest at a peak. The game of "who is next " on the acquisition block is keeping stocks afloat, and almost any company under $50 billion in market capitalization could be "in play." The share buyback programs are actively in place with almost $150 billion committed during this second quarter. It's a strong vote of confidence by American corporations in the value and merits of their own stocks.

So, we see strong corporate earnings flow, private equity activity at fever pitch, active share buy-backs, net in-flows into equity mutual funds and relatively low interest rates ... the S&P 500 is reflecting all of these positive factors.

Georges Yared is the CIO of Yared Investment Research. For more growth ideas please visit the web site