Bush Settles On Tariff For Steel Imports

Washington Post ^ | 3/5/02 | Mike Allen and Steven Pearlstein

[Tumbleweed_Connection]

President Bush decided yesterday to impose tariffs of up to 30 percent on most imported steel as part of a broader plan to rescue the nation's financially troubled steel industry, administration officials said.

Under the plan Bush endorsed at an Oval Office meeting with advisers, steel imported from Canada and Mexico would be exempt from the duties, as would imports from developing countries such as Argentina, Thailand and Turkey. Japan, China, South Korea, Russia, Ukraine and Brazil would be among the nations subject to the tariffs.

[Tumbleweed_Connection]

Donate Here By Secure Server

Or mail checks to
FreeRepublic , LLC
PO BOX 9771
FRESNO, CA 93794
Send PayPal direct to JimRob@psnw.com

[Texaggie79]

Once again, we put aside economics and settle for uneducated popular ideas.

[weikel]

This was a stupid decision there is nothing protectionism can accomplish for the steel industry that taking away the special legal privliges of labor can't do better can't do better.

[Texaggie79]

It can make the unions "feel better"........... blech

[weikel]

LOL c'mon get me some 30's style union busters and declare me above the law ill save the US steel industry no tariffs neccessary.

[Dog Gone]

This is a tough issue. Putting tariffs on steel will cost each of us a lot of money. Allowing foreign dumping of steel could cost us the domestic steel industry, something which goes to the heart of national security.

The question is how much of lower cost of imported steel is due to foreign government subsidies, and how much is actually attributable to our own inefficiencies in producing our own. We should protect ourselves against the former, but not the latter.

[Willie Green]

The question is how much of lower cost of imported steel is due to foreign government subsidies, and how much is actually attributable to our own inefficiencies in producing our own. We should protect ourselves against the former, but not the latter.

This steel tariff is a step in the right direction, but still inadequate.

The ideal 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:

[sam_paine]

Damnit! The steel posts I've been buying for my fence say Korea on them. I'll just grab my ankles now so some detriot union boys can make $50/hr to stand around and drink coffee.

[weikel]

Get rid of labors special privliges and the enviromental laws. We should protect ourselves against export subsidies( foreign steel companies do not have a real incentive to dump without export subsidies because it cost them money) but not against normal competition from foreign steel companies.

[weikel]

LOL

[Texaggie79]

It matters not what makes it cheaper. If it is cheaper, it makes no since to waste our resources creating it. Imagine if you are running a company and you make your own sprockets. If you can BUY sprockets for cheaper than you make them, would you not just buy them and spend your freed up resources on more needed material? Or do you keep making sprokets to keep your sprokets makers happy and not put them somewhere that will benefit the company more?

[Tumbleweed_Connection]

How much unemployment will this bill create?

[Dog Gone]

It doesn't matter what makes foreign steel cheaper IF you can be assured that you have a reliable supply at the cheaper price. If your domestic production is destroyed, it's no economic loss. It's actually a gain.

But if, after your domestic source is destroyed, the foreign source is then free to raise prices to higher levels than could be charged if domestic production existed, or if that supply is interruptible because of a change in foreign governments or an act of war, then you have been hosed, and it very much does matter.

[weikel]

We can be assured steel production within the American sphere of influence ie the Western Hemisphere and Japan won't be interrupted so as long as we have sufficient production there we should be fine.

[Dog Gone]

How much unemployment will this bill create?

Good question. This will hurt manufacturers a lot. The domestic auto industry will be hurt. Any way that you look at this, this is a tax increase and that hurts the economy and costs jobs.

[Texaggie79]

We will always have some sort of steel production going on. If prices change from foreign, then we pick it up here.

Remember, the foreign country is getting paper for tangible goods.

[Tumbleweed_Connection]

You are saying Bush is imposing imports to avoid possible difficulities resulting as an act of war?

[Dog Gone]

That's one consideration. The primary purpose for doing this is to protect the domestic industry while it restructures itself to be competitive in the world market again.

Obviously, we would be better off as a country if we could make low-cost steel ourselves. It keeps jobs, and helps pay taxes. If these tariffs are temporary (and I think that's how they're being pitched), then it's probably a good investment. If, instead, they protect an inefficient industry that will not reform, it's going to cost us far more in the long run.

[airborne]

Only if big steel does restructure and doesn't just keep the profits . Big steel needs to modernize in order to become competitive in the world market.

[airborne]

Only if big steel does restructure and doesn't just keep the profits . Big steel needs to modernize in order to become competitive in the world market.