While Hillary has the vapors over Trumps anti China bellicosity, Obama gets out in front with a 522% Chinese steel tariff
America's Mistake Over Chinese Steel: Imposing Tariffs Makes Americans Poorer
Tariffs are a terrible idea for Americans, and they create the ground work for international conflict, and in the past have been sufficient reason for wars.
More below the fold.
"The U.S. has decided to impose import duties of some 500% on a certain type of Chinese steel and lesser amounts on some Japanese steel. This is not a good idea. The aim of having an economy is to make its citizens richer. Tariffs make consumers poorer. This is true even if we are talking about “anti-dumping” tariffs, “unfair” trade or even government subsidies. Imports are what make us richer and the cheaper we get them the richer we become."
So, we are protecting a few workers by forcing all consumers to pay more for steel? Why do politicians always sacrifice the little guy, for the connected industry, union, or wealthy with money enough to buy influence? This is the face of graft, and corruption, you pay, and the politicians friends (those who give him money) get the benefit. And we elect these people?
China is swimming in steel, among other products, and the Chinese economy is not in very good shape, so the CCP is willing to subsidize foreign sales to reduce political unrest.
"If Chinese steel mills try and sell us steel at a price we wish to pay for it, then why should the government try and tax either of us out of this mutually beneficial transaction?
US steel makers say that the Chinese government unfairly subsidises its steel exports. Meanwhile China has been under pressure to save its steel sector, which is suffering from over-capacity issues because of slowing demand at home.
China’s Ministry of Finance has not directly responded to the US ruling but on its website this morning it has said that China will maintain its tax rebate policy for steel exports as part of its efforts to help the bloated steel sector recover.
These tax rebates are seen as favourable policies to shore up ailing steel companies in China, and to avoid massive job losses. Expect more fiery rhetoric from the US on China’s unfair trading practices soon.
So what? The allegation is that the Chinese taxpayer is subsidizing that Chinese production and export of steel. That means, by definition, that the Chinese taxpayer is coughing up taxes to make the American consumer better off."
China made some colossal errors and now they have too much steel, so why should not US consumers benefit from this problem? It is beginning to look like the politicians are not interested in the little guy but instead they are interested in big steel, and big unions. The politicians argument that this is to protect the union workers is hogwash. The federal government could do that for far less cost to the consumer/taxpayer by simply providing some assistance to the steel workers until this glut resolves. But they do not even discuss this, instead, they seek to support the entire steel industry through tariffs. Could it be that their real interests are supporting big steel, and big union, and that the benefits accruing to the worker are incidental?
If not, why do the Clintons spend so much time selling influence to the wealthy, the connected, the big bankers, the big steel companies, the big unions? They could simply protect the little guy and not need to shake down these businesses. They have plenty of money, even without the influence peddling talks, er, speeches.
Let's say Target decides to give customers a boost to the pocket book. It does so by requiring that all purchases be made in Target Bucks, which are exchanged at $1:1.25 Target Bucks, meaning that Target Bucks are worth 125% of $1, however, the price of every product in Target remains the same. So now customers can buy a product from Target for 1 Target buck, while the same product at another store would cost $1, but the Target Buck cost less than a dollar to purchase.
Let's say the customer has $100, at another store it will cost $100 to buy a product, but at Target, the customer uses $100 to buy 125 Target Bucks and uses 100 Target Buck to purchase the product, now the customer has 25 Target Bucks to spend on something else! This is an obviously good deal for the consumer.
Applying this to our facts, it is shocking that the politician would want to penalize the American consumer for engaging in such a transaction with China. The politician should want this to happen, it will increase the Americans standard of living, yet the politician is hidebound to kill this, and take action which only benefits big steel, big union, and only incidentally, the steel worker.
This tariff will make American consumers poorer, while transferring money from them to these big businesses, and unions.
"The point of an economy is to make the people in general richer. And imports do that. We get to consume those things which foreigners can produce better or cheaper than our fellow countrymen can. The fact that those foreigners are being subsidized by their home government to do this just increases the amount by which we are being made richer.
The only rational trade policy is one of unilateral free trade–no restrictions, duties or tariffs on any imports."
First thing we do, we kill all the crony politicians, at least metaphorically. This is little more than enriching the wealthy off the backs of all Americans.
Again, this is the blue model in action, crushing the little guy, and giving the wealthy a boost.