Posted on 05/22/2016 10:35:05 AM PDT by Kaslin
China produces more than 820 million tons of steel per year, of which about 100 million tons are exported and sold at a discount overseas. Only about 3 percent of those exports go to the United States, but American steel producers bristle at the competition. So in keeping with the time-honored practice of the US steel industry — "the backbone of American manufacturing," as it proudly calls itself — domestic producers are rising to the challenge.
Are they doing so by making their operations more efficient? By improving the quality of the steel they sell? By cutting their prices to maintain market share in the face of a tough competitor?
Not exactly. They're getting the federal government to punish American consumers.
"The United States on Tuesday said it would impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used for car body panels, appliances, and in construction," reported Reuters. "The Commerce Department said the new duties effectively increase more than five-fold the import prices on Chinese-made ... steel products."
American steel producers complain that their counterparts in China are "dumping" cheap steel on the US market, benefiting from Chinese tax subsidies to undercut other companies' prices. Because of these "unfairly traded imports," lament Thomas Gibson and Chuck Schmitt of the American Iron and Steel Institute, some US steel mills have had to be shuttered, and 12,000 steelmaking jobs were lost during the past year. p>It is always painful when workers are laid off and once-thriving facilities have to be closed. But the steel industry is far from unique. The US economy creates and destroys millions of jobs every year. No industry is exempt from the upheaval, retrenchment, or losses caused by changes in technology, trade, and consumer demand. The digital revolution has decimated once-formidable companies and careers in fields as different as journalism, instant photography, tax accountancy, and recorded music. Would anyone argue that the government should have suppressed the internet in order to preserve the employment and production patterns of the 1980s? Should the Commerce Department have imposed taxes of 500 percent on e-mail services and word-processing software so preserve the viability of typewriters and stenographers?
For that matter, as economist Don Boudreaux has remarked, should the polio vaccine have been taxed into unaffordability for the sake of all the jobs that were once linked to the care of polio victims?
Sooner or later, competition and disruption challenge every industry and market. The pain they can inflict is real, but far greater and more enduring are the benefits and prosperity they generate. American steel mills are understandably chagrined that competitors from China are beating them on price. But cheaper steel also means more affordable cars, homes, and appliances for tens of millions of Americans. It means more employment at General Motors, Boeing, and John Deere. Jacking up steel prices through "antidumping" tariffs and other protectionist measures makes life more expensive for all of us, and jeopardizes far more jobs than it saves.
There is nothing nefarious about Chinese mills selling steel at bargain prices in the United States and other foreign countries. Companies routinely mark down the price of their merchandise — in clearance sales, as loss-leaders, for promotional purposes, or simply in response to local conditions. The Commerce Department, and the US producers clamoring for punitive tariffs, claim that Beijing is subsidizing Chinese steel exports. Even if that's true, why should Americans object? We aren't being harmed by China's gift — we're being enriched. It is the federal government and its tariffs that harm us, by deliberately making steel more expensive and thereby making US consumers poorer.
For years, American steel companies have bellyached about foreign competition, and for years Washington has responded with quotas, tariffs, "voluntary-restraint" agreements, and other restrictions on free trade. The Obama administration, like the Bush 43, Bush 41, Reagan, Carter, Ford, and Johnson administrations before it, has yielded to the industry's unreasonable demand for more trade barriers and corporate welfare. It's a pity. Nucor, Steel Dynamics, United States Steel and other American producers should be told to man up and face their competition in the marketplace. They shouldn't be rewarded for hiring lobbyists and publicists to wangle special-interest privileges that no business has a right to claim.
It is irrational to attack foreign exporters for not charging us higher prices. And it is preposterous to whine that Chinese steel is being "dumped" on the US market. Steel that enters the United States has been sold by a specific Chinese producer and bought by a specific American buyer. The transaction is voluntary, the price has been mutually agreed to, and the benefits ripple outward through the entire economy. If domestic steel producers want that buyer's business, let them earn it the old-fashioned way, by outperforming their Chinese counterparts on price and quality. Protectionist tariffs are for crybabies, not for the backbone of American manufacturing.
Tariffs are simply a revenue scheme which enriches unions, crony capitalists, and fascists governments. They are a band aid to cover self inflicted wounds.
It is best, not better, for the citizens to have the very smallest government feasible, if citizens value their freedom and property. The wise Madison; who had the temperament of the Athenian Greeks; told us so.
Since the ratification of the 16th Amendment in 1913, which permitted the substitution of Income Taxes for Tariffs; has government become smaller???
Arguing that Tariffs are better for a nation than Income Taxes is selfish nonsense, as both distort the cost of the factors of production, severely harming the flow of trade and more critically, the ideas that come along w/them.
A linchpin of personal freedom is economic freedom.
I confess, I’m not following you. The strictures on coke plants spring from the environmentalism fraud. One simply builds coke plants a necessary. It will take reform of many attitudes. I think the American people are finally waking up to the fact that the economic policies of the last 60 years have destroyed a once viable economy and built up our enemies.
$505,000,000,000 flowing in one direction EVERY YEAR is stupid, asinine, and extremely dumb. China can export all they want to Walmart, so long as US manufacturers can export to China without restrictions, road blocks, and other subtle ways to impede imports.
Tariffs can be applied with judgement. See Alexander Hamilton, James Madison, and the economist Friedrich List
Fixed it for ya.
Tariffs can be applied with judgement. See Alexander Hamilton, James Madison, and the economist Friedrich List
This speaks to the positive effects of tariffs limiting Federal income. You have a logic problem.
He also taxed whiskey and used government troops to impose the tax.
Seems all protectionist love to tax and control.
Reagan did a good job. He was not reflexively anti-trade but neither did he enthusiastically restrict our liberties to earn and spend our capital the way we see fit. He tore down some trade barriers and erected others.
You cannot escape the fact that if you restrict imports on, say Chinese steel, you create rent seeking by unions and the federal Governemt. Neither of those parties give a hoot about liberty.
No one says “restrict imports.” I did say even the price differential caused by cheap labor in foreign countries.
One does not build coke plants in the US, see “war on coal”, Those that are still operating are targeted for closure and have sky high operating costs.
China is not the problem. While we are busy driving coal to extinction their are embracing it. Hillary and Obamah want the complete deindustrilization of the US in order to defund the US middle class.China and tariffs are deliberate misdirection to avoid acknowledging that we are powerless to stop them from doing it.
So instead we will join them in taxing and controlling businesses.
We have unemployment and crime costs that are accentuated by companies moving out of the country. US businesses would profit more by employing citizens in my world, while countries like China that subsidize their exports while tariffing our imports (and getting 50% of all US businesses in China with their intellectual property) would profit more under your approach.
We see the world differently, it appears, save for the need to reduce government.
More words of “wisdom” from the free traitors. This is the same gang that gave us nafta and gatt. And a destroyed industrial base.
I like tariffs just fine. I like antidumping tariffs even moar.
Only a real douche disparages George Washington.
The government passes a law that says you may not import unless you pay an extra e,g, 20%. If you do not pay the 20% you will go to jail.
Sounds like tariffs are restrictions. If tariffs do not cause a decrease in imports, that is restrict them from coming in, then what is they are supposed to do? Simply raise revenue?
No political leader is above reproach or criticism not even Reagan. Deify them if you wish but they were smart enough not to do so. The whiskey tax was hideous and tyrannical. Not everything Washington did was good.
Signing the Tariff Act of 1789 was a real good thing.
What a hyperbolic idiot you are. If an importer cannot or refuses to pay the tariff then the cargo is impounded and sold at auction NOBODY GOES TO JAIL.
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