Saturday, March 31, 2007

Let's Stop China's Foreign Aid to U.S. Consumers

News Report: "The US government is planning to announce a new tariff policy targeting state-subsidized goods in non-market economies, adding that the move is expected to lead to new duties on a wide range of Chinese exports. The report said the test case for the new policy was brought by US paper company Newpage before the Commerce Department.

U.S. industries from steel to consumer goods are now expected to bring forward similar action against imported goods benefiting from state support such as government grants, bailouts and low-interest loans."

Translation: The Chinese government, using tax dollars supplied by Chinese citizens, has been subsidizing American consumers and companies by giving government grants and low-interest loans to Chinese manufacturers, which allow them to sell their exports to Americans at low prices. Although these low prices raise the standard of living of many American consumers and businesses, U.S. businesses competing against Chinese producers would like Americans to pay higher prices for Chinese goods, so that they can compete more effectively.

In other words, we should use the political process to end the practice of China subsidizing American consumers and businesses, and force them to charge us higher prices. We should stop China's generous "foreign aid" to American consumers and businesses.

Question: What if Chinese producers received such generous grants and subsidies from the Chinese government that they were able to ship products here for free? Why should we object?

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