Freedom New Mexico
Labor, the industry and their supporters call the U.S. International Trade Commission’s decision to impose tariffs on Chinese steel pipes a good thing. Indeed, making goods more costly is a good thing — if you’re in competition with the producers of those goods.
Thus the support for tariffs on Chinese products from both the American industry that stands to gain and from the labor union that stands to gain from the competition getting more costly.
There must be something in the water in Washington that makes all administrations impose dumb tariffs. This one was really dumb.
The U.S. International Trade Commission, which is a U.S. government agency, last week imposed tariffs of 10.36 percent to 15.78 percent on pipes used mostly in the oil and gas industries. The commission could decide in the spring to impose tariffs as high as 96 percent.
The duties are meant to offset the government subsidies the U.S. government says China provides its steelmakers.
We’re not going to dispute that the Chinese government subsidizes its steel industry, the same as the U.S. government subsidizes many U.S. industries. The fact is, however, there are better ways to help the U.S. steel industry than by escalating a trade war that will harm consumers on both sides.
If the Obama administration were serious about helping the steel industry, it could start by rolling back taxes and the maze of federal regulatory agencies that businesses have to deal with.
Ohio Gov. Ted Strickland both advocated last month for the steelmakers before the commission and he praised the tariffs. The governor apparently is unaware there are Ohio companies that buy the products involved. If Ohio were serious about leveling the playing field, state government could lessen its regulatory burden, including the still-state-controlled worker’s comp system.
In the meantime, the solution, such as it were, seems to be to force everyone to pay higher prices just to help one industry.
The pipes now subject to tariffs are used primarily in the oil and gas industries. When companies in those industries start paying more — either for the Chinese product or the costlier American products the tariffs are meant to help — where do you suppose those costs will be passed? Know any American consumers who use oil and gas?
A group of U.S. steelmakers and the United Steelworkers of America union sought the duties in April, arguing the Chinese steel industry was flooding the U.S. market with pipes sold at unfairly low prices, or dumping. U.S. steel pipe production fell by about 70 percent and almost 40 percent of the work force was laid off, The Associated Press reported. A lawyer for the Chinese blamed the boom-and-bust cycle of oil,
The loss of American jobs is bad. However, rather than punishing American consumers for the help the Chinese government gives its steel industry, U.S. officials should make ours a more business-friendly climate.
As is, U.S. consumers get to a) pay higher prices with the homemade product or b) pay higher prices with the tariff-laden Chinese products.
Government again shows it would rather protect an individual industry rather than an entire nation of consumers.