Tirades on steel tariffs

Washington Times ^ | 3/13/02

[Tumbleweed_Connection]

Last week, the administration slapped tariffs of up to 30 percent on steel imports. The move has seriously tarnished President Bush's image as a free trader and must have been painful for Trade Representative Robert Zoellick to argue publicly. What is more, it will put a hefty burden on U.S. consumers, corporations and, eventually, taxpayers. Abroad, U.S. trading partners are fuming, and many have made clear, through statements and actions, that there will be consequences to Mr. Bush's decision. Although a trade war will only hurt consumers worldwide, Mr. Bush knew he risked international retaliation.

[Texasforever]

Yes but PJB loves it.

[Willie Green]

Bush's action's are a step in the right direction, but still inadequate due to inconsistancy.

The optimal solution is a relatively low, across-the-board revenue tariff of 10-20% on ALL imported goods from ALL foreign countries.

"Targeted" tariffs have the disadvantage of providing loopholes and, as others will be quick to point out, the potential to hurt other domestic industries.

A prime example is our failed embargo on the importation of Cuban goods. Cuban sugar has been routinely imported to the U.S. through the back door: Canada. Cuban sugar is shipped to Canada where it is dissolved in molasass. "Canadian" molasass is then legally imported to the U.S. where the sugar is easily refined back out. The leftover molasass is then exported back to Canada where the cycle is repeated. Large sugar-users (such as candy makers) are also closing their domestic factories and moving to Canada where they can legally use Cuban sugar, then import it as candy to the U.S.

An across-the-board revenue tariff of 10-20% would circumvent this type of abuse. Additionally, the revenue could be used to offset a major reduction or elimination of the corporate income tax, providing domestic producers a more "level playing field". (A Proposal to Abolish the Corporate Income Tax)

From a historical perspective, a revenue tariff of 10-20% is NOT excessive:

2000 National Productivity of Steel Production

Country	Steel Production  (million metric tons)	Employment  (thousands)	Productivity (tons/employee)
Australia	8.5	21	404
Austria	5.7	12	475
Belgium	11.6	20	580
Brazil	27.9	63	443
Canada	16.6	56	296
Finland	4.1	8	512
France	21.0	37	567
Germany	46.4	77	602
Italy	26.7	39	684
Japan	106.4	197	540
Luxembourg	2.6	4	650
Netherlands	5.7	12	475
South Korea	43.1	57	756
Spain	15.8	22	718
Sweden	5.2	13	400
United Kingdom	15.2	29	524
United States	101.5	151	672

[WFTR]

I'd rather have a few unsold chickens scratching around the yard and some unhappy yuppies not getting to go to Europe than to have to depend on steel industries outside the U.S.

[Cacophonous]

The Europeans haven't minced their outrage.

I don't know why the Europeans are so upset. The protectionist USA has just screwed itself; the free trading EU stands to gain from the US mistake.

[Cacophonous]

I'd rather have a few unsold chickens scratching around the yard and some unhappy yuppies not getting to go to Europe than to have to depend on steel industries outside the U.S.

Nicely said; I'm with you.

[Willie Green]

the free trading EU stands to gain from the US mistake.

No mistake on the U.S. part.
The EU only "free" trades among themselves.
They screw US at every opportunity.

[Cacophonous]

Oh I know; my comment was tongue in cheek (if you have seen me post on here before, you know I am staunchly in your corner on this issue, Willie).

I was trying to get a rise out of the "free trade" cult.

[Willie Green]

I was trying to get a rise out of the "free trade" cult.

Bravo!!!

I did get the impression that you were on "my" side from previous posts.
But you tossed me a little curveball on that one.
(plus - it's gettin' late and my reactions are off kilter!)

G'nite & take care!!!

[Free the USA]

Check the Bump List folders for articles related to and descriptions of the above topic(s) or for other topics of interest.

[Jeremy_Bentham]

Only approximately a 1/4 of the steel consumed by US companies comes from outside the US, so you are hardly dependent on steel from foreign companies. You can get this information from the US Geological Survey for "Iron and Steel." For example, in 2001, the estimated net import reliance, as a percentage of consumption, was 15%.

[Jeremy_Bentham]

See post #11. On the other hand, 50% of the poultry imported into Russia comes from American farmers.

[Cacophonous]

Only approximately a 1/4 of the steel consumed by US companies comes from outside the US

So I would again ask: Why is the EU so upset about the steel tariffs if it affects them so little?

[Jeremy_Bentham]

Why is the EU so upset about the steel tariffs if it affects them so little?

The answer should be quite obvious. How upset, and why, they are, depends on what percentage steel exports are of their total exports, as to whether it effects them a little, or a great deal. I don't have those figures at present, but I should be able to locate them. The same with the US with regard to imports.