Please turn on JavaScript

Brooks Wilson's Economics Blog: A Trade Peccadillo?

Friday, January 29, 2010

A Trade Peccadillo?

Ninety-three percent of economists agree with the statement that "tariffs and quotas usually reduce general economic welfare" (Richard Alston, J. R. Kearl, and Michael Vaughn, "Is There Consensus among Economists in the 1990s?," American Economic Review, May 1992 or Dan Fuller Geide-stevenson, "Consensus Among Economists: Revisited," Journal of Economic Education, Fall, 2003).  Yet, protectionist trade policies remain popular in the general population and in many political circles in Washington.  A Reuters article, "US slaps duties on electric blankets from China," describes the most recent efforts in Washington to limit trade.

WASHINGTON, Jan 27 (Reuters) - The United States has set preliminary anti-dumping duties ranging from 90 to nearly 175 percent on about $30 million worth of electric blankets from China, the U.S. Commerce Department said on Wednesday.
The ruling is a victory for Jarden Consumer Solutions, a Florida-based subsidiary of consumer products company Jarden Corp (JAH.N). It filed a petition earlier this year asking for protection against its Chinese competitors.

The relatively small case is of one several ongoing U.S. investigations into charges that Chinese companies are selling their goods in the United States at unfairly low prices and benefit from unfair government subsidies.

The products covered by the probe include finished, semi-finished, and unassembled woven electric blankets of all sizes and fabric types, whether made of man-made fiber, natural fiber or a blend of both...

Commerce will make its final decision on duty levels in June, setting the stage for the U.S. International Trade Commission to cast a final vote in July or early August on whether to allow the duties.
The government is attempting to cover its peccadillo with the sackcloth of winning a more balance playing field for our producers.  Would it be good if the subsidies were eliminated? Yes, but these types of policies are often used to disguise protectionist policies.

No comments:

Post a Comment