Thursday, May 22, 2008

Trade Policy: Always Looking Out for the Consumer

NPR -- If you think your dry cleaning bills are high now, hang on. Wire hangers are getting more expensive due to import tariffs on cheaper hangers from China. So dry cleaning operators are asking customers to return their hangers to help keep costs down.

A flood of cheap Chinese hanger imports in recent years has forced all but one major U.S. hanger manufacturer out of business. M&B Hangers in Leeds, Ala., hung on.

In 2006, U.S. shipments of wire hangers were valued at $40.39 per 1,000, compared with $31.69 per 1,000 for shipments from China, according to the U.S. International Trade Commission. Last year, the United States imported 2.7 billion wire hangers from China — up 52% from 2006.

Since the tariff was imposed, nearly every dry cleaner in the U.S. has had to pay more for hangers, on average about $4,000 a year.

5 Comments:

At 5/22/2008 6:54 PM, Anonymous Anonymous said...

I understand why dry cleaners would choose to buy hangers at 0.32 cents each rather than 0.40 cents each. But really, will this fraction of a penny make any difference to consumers even if it is passed along to them? It's got to be less than 0.5% of their dry cleaning bill.

 
At 5/22/2008 9:46 PM, Anonymous dkapitalist said...

LOL! You are not going to believe this but I am currently in the middle of a litigation regarding the sale of dry cleaning business. I am reading this blog while taking a break from combing through dry cleaner discovery. One of the claims is that the seller under reported the cost of hangers. Thanks to Carpe Diem I now know why. Great timing!
Love this blog.

 
At 5/23/2008 8:09 AM, Anonymous Machiavelli999 said...

anon,

No, this one tarriff won't make much of a difference. The US economy is too robust to have a tariff on hangers bring to its knees. HOWEVER, its not as if the current political climate is conducive to only the protection of hanger producers. On our current path will soon be "protecting" everyone. Everytime our government says "protect", its a codeword for "We will make something scarcer and more expensive"

This is just one example of a worrying trend.

 
At 5/23/2008 11:26 AM, Blogger Executive Slacker said...

machiavelli:

You could not be more spot on. Protectionist measures of any kind drive up the price of everything. It's a fundamental inability to recognize that the most efficient producer should win. Failing that means an inefficient system with higher prices for all.

 
At 5/26/2008 11:29 AM, Blogger OBloodyHell said...

> Protectionist measures of any kind drive up the price of everything.

Just the kind of meddling crap which the government should not be doing -- and which violates the spirit, if not the letter, of the "Contract With America" which swept them into office in the 90s.

Are you listening, GOP?

 

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