Back to the Future via Biff - or Trump

downloadQuite the uproar was created recently with the announcement by the current occupant of the Oval Office of his intention to impose an across-the-board 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. His stated target is China for “dumping” steel on the U.S. market.
“Dumping” is actually a formal term and refers to a product being “dumped” on a foreign market by selling it at less than fair market value as a means of cornering the market in that foreign country. The price of the product in the importing country is far less than the price of the same product being sold domestically, in this case, China.
Back in the 1980s, the threat to our domestic steel industry was Japan. Trump, in his wisdom, is claiming that China is currently dumping steel on the U.S. market and his across-the-board tariffs are intended to address that unfair practice. Problem is that China currently accounts for only about two percent of our imported steel, so the across-the-board action is actually hurting allies such as Canada, which accounts for almost 50 percent of our imported steel.
A few months back, Commerce Secretary Wilbur Ross discussed imposing anti-dumping duties on Canada for its exports to the United States of softwood lumber. Anti-dumping duties are targeted to a specific country to counter the effect of the less than fair market value pricing. It seems baffling that if Chinese steel exports were the true culprit, then imposition of anti-dumping duties should have been the preferred course of action, if applicable.
Imposing or raising tariffs on imported products are designed to protect a specific industry. The United States Customs Service was created in 1789 to collect tariffs on foreign goods as a means of protecting the fledgling industries of the newly-created nation. In today’s global economy the rules are a bit different.


Raskin talks NAFTA reform with advocacy panel

  • Published in Local

ROCKVILLE – Congressman Jamie Raskin (MD-08) convened a panel Saturday afternoon to discuss the effects of NAFTA on the economy of the United States.

“There’s a lot going on and lots of calamities bearing down on us but there are some big structural questions that still need to be addressed,” Raskin said. “One of them is how do we develop a free trade policy that is also a fair trade policy.”

Since being negotiated and signed by then-Presidents George H.W. Bush and Bill Clinton in 1993, critics argue the North American Free Trade Agreement fails to address trade deficits, transparency, labor conditions, environmental impacts and workers’ rights.


Trade decisions have implications

It's quite simple, at least in the simplified world of Donald Trump. You want to stem the tide of foreign imports? Just raise tariffs on imports of foreign goods. You want to punish trading partners who are not playing by the rules? Just raise import tariffs across the board.  You want to bring back the jobs lost overseas as a result of globalization? Just raise import tariffs to a point that makes these products unaffordable.

Sounds so simple. However, as with most things in life, nothing is as simple as simpletons would have you believe. Raising tariffs is no different.  There are ramifications and those ramifications must be factored in to whatever decisions are made regarding tariffs as part of the overall revamping of our trade policy.

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