Wednesday, May 25, 2011

Do Anti-Dumping Tariffs on Furniture from China Create U.S. Jobs? Only for Washington Lawyers



From the Washington Post article "From China, An End Run Around U.S. Tariffs"

"To avoid a 2005 U.S. tariff on Chinese-made wooden bedroom furniture, Chinese furniture companies moved operations to other Asian countries, thwarting U.S. efforts to curb “dumping,” the export of goods at unfairly low prices (see chart above).

The result: Imports now account for about 70 percent of the U.S. market for beds and similar items, up from 58 percent before Washington intervened to try and protect domestic manufacturers from Chinese “dumping,” or the export of goods at unfairly low prices.

The only Americans getting more work as a result of the tariffs are Washington lawyers, who have been hired by both U.S. and Chinese companies. Their work includes haggling each year over private “settlement” payments that Chinese manufacturers denounce as a 'protection racket.'"

Cato's Dan Ikenson responds thoughtfully here on the Forbes blog.

Update: The chart below shows the significant decline in the CPI for Furniture and Bedding over the last ten years, which is now at about the same level as in the early 1990s.  Thanks largely to competitively priced imports, Americans today have the most affordable furniture in U.S. history.  


34 Comments:

At 5/25/2011 5:12 PM, Blogger Sean said...

Not terribly shocking. :)

 
At 5/25/2011 5:22 PM, Blogger Leo Krasnozhon said...

Only rent-seeking jobs. Lawyers, lobbyists, and other rent-seekers located on Penn Av in Washington DC. Why do countries still shifting gears of trade policy from pro-free trade to protectionism if the 2007-2009 recession is over? What is there to protect? The US trade policy is not so bad yet. I personally consider Ukraine's trade policy the most protectionist at present moment. Here are my thoughts on Ukraine's trade policy: http://ukrainewatch.blogspot.com/2011/05/robbing-breadbasket.html

 
At 5/25/2011 5:27 PM, OpenID Sprewell said...

What a disgrace that these scumbag US furniture makers shake down foreign companies for money by using our US govt as a threat, so that we also have to pay more for the furniture! It's a good thing I only buy foreign when it comes to cars, I think I'll have to do the same with everything else.

 
At 5/25/2011 6:00 PM, Blogger Rufus II said...

I guess the Chinese, and Vietnamese are paying those unemployment benefits to the unemployed workers, right? And the Food Stamps, and Medical Care for their families, also?


What?

Really?

Well, that sucks.

 
At 5/25/2011 6:02 PM, Blogger Rufus II said...

You know, I've never sold the first insurance policy to a Chinese Communist. Or, a Vietnamese Commie, either. Imagine that.

 
At 5/25/2011 6:07 PM, OpenID Sprewell said...

Rufus, as far as I'm concerned, the fact that the Chinese and Vietnamese aren't paying for unemployment "benefits" and food stamps and especially medical care- since when did that become a right?!- for unemployed US workers is a further benefit. Starve the beast till you can strangle it in the bathtub. :)

 
At 5/25/2011 6:17 PM, Blogger Rufus II said...

Is putting 20% of our population out of work, with no safety net (no unemployment, no food, no medical care,) what you call "starving the beast," Sprewell?

 
At 5/25/2011 6:41 PM, Blogger Rufus II said...

Come on, Benny; you're lumping PFCs in the Army in with "Federal Parasites." A little much, don't you think?

 
At 5/25/2011 6:51 PM, Blogger Benjamin said...

Rufus:

Hey, I am just repeating what I hear--the federal government is a huge, negative parasites, and public employees are parasites that get huge pensions.

I provided you with a list of federal employees, and they all get pensions, some better than others.

 
At 5/25/2011 7:03 PM, Blogger Rufus II said...

Uh, no, Benny. Way the biggest proportion of those 3 million DoD employees are junior enlisted that will serve a few years, fight a couple of wars for you, and then go home to Tullahoma.

Look, I'm on your side on this, I just didn't want a Bud to be inadvertently calling patriotic, young enlisted men (and women) "Federal Parasites."

 
At 5/25/2011 7:11 PM, Blogger Benjamin said...

Rufus:

Of course I like every soldier I ever met, just about.

But the Department of Defense, and other federal agencies, are coprolitic and parasitic. No getting around it.

 
At 5/25/2011 7:49 PM, Blogger Benjamin said...

I don't see what is so bad about limiting the amount of foreign furniture coming into the USA. Perhaps we could use this as a empirical test case.

If we limit imports of furniture, do we get inflation, or just more domestic-made furniture and more US employment?

 
At 5/25/2011 8:15 PM, Blogger Rufus II said...

I think what's going to happen in the medium-to-long run, Benny, is that Rising Transportation Costs, and Ever-Increasing Productivity in the U.S. will mitigate this, somewhat.

However, right now, we are going through a paradigm shift. Cheap goods from overseas, and exploding productivity (a very Good thing in the long run) are killing a large section of the lower-skilled workforce.

We can't just abandon these folks. They are important to our country, and, also, to our economy. Besides, they're part of us. So, it's hammering us one the "expenditures" side of the ledger. Medicaid, unemployment ins., food stamps, etc are up about 50%. This is a large part of our budget deficit.

Something like 80% of Consumer Credit last month was Student Loans. These people really ARE retraining like crazy. In the meantime, we need to "patch the deficit" where we can; but we need to understand where the "red ink" is coming from.

Rapid action is called for, but panic is to be avoided.

 
At 5/25/2011 9:08 PM, Blogger Buddy R Pacifico said...

Did the Chinese government encourage imports of U.S. furniture makers into China? Surely the Chinese state owned manufacuterers welcomed the competition. The Free Traders in the Red Chinese bureaucracy must have pleaded for low tariffs and no non-tariffs on U.S. made furniture.

Sarcasm for all of the above.

 
At 5/25/2011 10:00 PM, OpenID Sprewell said...

Rufus, except for the part about putting 20% out of work, as I'm not sure how you blame shrinking the govt for 20% unemployment, yes, that is starving the beast. If a large group of dummies wants to give politicians ridiculous amounts of power in return for a fake "safety net"- fake because of the huge unfunded liabilities of SS and Medicare as congressmen use the SS fund as a slush fund that they skim off the top every year- I have no sympathy for them when those deals inevitably go awry. Let me introduce you to a little concept called private savings, takes away having to depend on the govt.

Benjie, since I'm an anarcho-capitalist, I want no govt, doesn't matter what department, so your silly lists are lost on me. I want to take a nuclear bomb to the whole thing, bulldozers are so puny. ;)

Buddy, why would the Chinese worry about competition from US furniture makers when they ship their stuff around the world and it is still cheaper here than the US producers? :)

 
At 5/25/2011 10:21 PM, Blogger Benjamin said...

Sprewell--

The list is instructive. Perhaps that was lost on you.

 
At 5/25/2011 10:27 PM, Blogger Buddy R Pacifico said...

This comment has been removed by the author.

 
At 5/25/2011 10:34 PM, Blogger Buddy R Pacifico said...

"Buddy, why would the Chinese worry about competition?"

They don't, because the Red Chinese ensure their enterprises a protected from foreign compeitition within China; but what concern is that an to anarcho-capitalist?

 
At 5/26/2011 2:49 AM, Blogger Ron H. said...

"Is putting 20% of our population out of work, with no safety net (no unemployment, no food, no medical care,) what you call "starving the beast," Sprewell?"

Wow! I didn't realize there were so many furniture makers in this country. Who knew?

 
At 5/26/2011 8:24 AM, Blogger Jet Beagle said...

Rufus II,

Low cost imported goods do not cause unemployment in the U.S. Government intervention in markets causes unemployment in the U.S. Such job-destroying intervention includes:

minimum wage laws

manipulation of the money supply

extended unemployment benefits

food stamps and other government assistance

closed shop laws

high marginal tax rates on corporations

government price supports

stifling regulations and fees which inhibit job creation

I could go on and on.

Government is the problem,, Rufus.

 
At 5/26/2011 9:13 AM, Blogger Jet Beagle said...

Buddy Pacifico: "but what concern is that an to anarcho-capitalist?"

Well, I'm not an anarcho-capitalist, Buddy, but I do have an answer for you. I'm much more concerned about how misguided protectionists might raise the prices I pay for goods than I am about the higher costs the Chinese government imposes on its citizens. Protectionism always harms the consumers in the nation which imposes the protectionist measures. Free trade - whether it's practiced by all nations or just by a few - always helps consumers.

As the brilliant economist Joan Robinson pointed out many years ago:

'"If your trading partner throws rocks into his harbor, that is no reason to throw rocks into your own."

 
At 5/26/2011 9:15 AM, Blogger Rufus II said...

It's not an "either-or" situation, Beagle. Government Can be the problem (and, often is.)

But, sometimes, circumstances are the problem. At those times, "government" is one of the tools we use to attempt to mitigate the problem. Sometimes it works/sometimes it doesn't.

Sometimes it takes everything you've got just to keep your head above water until the tsunami goes out. Sometimes they never even find your body.

 
At 5/26/2011 9:28 AM, Blogger Buddy R Pacifico said...

Jet Beagle,

Here is a quote from myself on Free Trade:

"If your trading partner is a country dominated by communist owned enterprises, that is receding from dabbling in capitalism, then unilateral Free Trade will be around for infinity."

 
At 5/26/2011 9:33 AM, Blogger Jet Beagle said...

Rufus II,

No matter how much you believe otherwise, Rufus, it is always government which causes unemployment to persist.

 
At 5/26/2011 9:35 AM, Blogger Jet Beagle said...

Buddy Pacifico: "then unilateral Free Trade will be around for infinity"

Perhaps, but that's a problem for the Chinese people to solve. They're the ones who are being harmed.

 
At 5/26/2011 9:38 AM, Blogger Jet Beagle said...

Rufus,

Can you provide one example to prove that government intervention - other than by engaging in war and removing millions from the workforce - has "solved" an unemployment problem?

 
At 5/26/2011 9:44 AM, Blogger Rufus II said...

Ah, when you get into using words like "always," and "never," you're getting into a religious argument. I try not to spend much time on those.

On a "collective" basis it's obvious that government policies can have a strong effect on the number of unemployed.

On an individual basis, well, hell, it's obvious that there are a kazillion things that would lead to me being unemployed.

 
At 5/26/2011 9:51 AM, Blogger Rufus II said...

Beagle, I'm sitting here, high and dry, behind a big, old levee built by the WPA during the Depression. The TVA is another.

Those projects were "make-work" projects that have benefitted the country an Untold (Untellable) amount.

No Private company could have, or would have had a reason to have, built those levees. But, the benefit to the country are Enormous. Beyond, Enormous.

Look, we Invented government for a reason. That "reason" hasn't disappeared.

 
At 5/26/2011 11:34 AM, Blogger Buddy R Pacifico said...

Jet Beagle stated:

"Perhaps, but that's a problem for the Chinese people to solve. They're the ones who are being harmed."

U.S. producers are harmed also. It is parasitic to support harm for U.S. producers, by ignoring the "rocks in harbors" for them at foreign shores (chronic and debilitating harm).

parasitic-capitalist?

 
At 5/26/2011 2:51 PM, Blogger Ron H. said...

Rufus

"Beagle, I'm sitting here, high and dry, behind a big, old levee built by the WPA during the Depression."

You might want to word that a little differently. If a levee is protecting you, then you are sitting "Low and dry", as you are living in a flood plain below flood levels.

And, as you sit there, smug in your dryness, you might want to consider how others downstream from you feel about their homes being underwater, because your section of levee channeled floodwater past you, and allowed it to cause worse flooding for them.

You might also ask those whose land has been intentionally flooded to prevent worse flooding downstream how they feel about it.

as for the TVA, you should be aware, that, among other things, 3 private regional electric companies were driven out of business by this government enterprise.

In a 1962 speech, Ronald Reagon had the following to say about the TVA:

"One such considered above criticism, sacred as motherhood, is TVA. This program started as a flood control project; the Tennessee Valley was periodically ravaged by destructive floods. The Army Engineers set out to solve this problem. They said that it was possible that once in 500 years there could be a total capacity flood that would inundate some 600,000 acres (2,400 km2). Well, the engineers fixed that. They made a permanent lake which inundated a million acres (4,000 km²). This solved the problem of floods, but the annual interest on the TVA debt is five times as great as the annual flood damage they sought to correct. Of course, you will point out that TVA gets electric power from the impounded waters, and this is true, but today 85 percent of TVA's electricity is generated in coal burning steam plants. Now perhaps you'll charge that I'm overlooking the navigable waterway that was created, providing cheap barge traffic, but the bulk of the freight barged on that waterway is coal being shipped to the TVA steam plants, and the cost of maintaining that channel each year would pay for shipping all of the coal by rail, and there would be money left over."

Note also that like far too many other gofernment projects and agencies, TVA still exists today. Well beyond any pretense of aleviating unemployment.

It's interesting that you condemn communism, but praise such socialist ideas as the WPA and
TVA.

 
At 5/26/2011 3:59 PM, Blogger Rufus II said...

I condemn Zealots, Idealogues, and "religious thnkers" on both ends of the spectrum.

I, also, despise "hyperbole," ad hominem attacks, and having my comments mischaracterized (such as you referring to my comment as "smug."

I have friends, and family, that have been greatly harmed by this flood. The economy of this area basically shut down for several weeks. I am "Thankful" for the levee. I have friends that farm over around East Prairie, Mo, where they blew the levees. I'm not the least bit "smug" about their plight. You argue like a schoolchild. Always short on the facts, but full of vitriol, and noise.

I loved Ronald Reagan. I even voted for him when it went against my perceived self-interest. But, in '62 he was dead wrong about the TVA. It brought electricity to millions, and brought the SE into the 20th Century.

 
At 5/27/2011 3:01 AM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 5/27/2011 3:15 AM, Blogger Ron H. said...

[TVA]"It brought electricity to millions, and brought the SE into the 20th Century."

And now, after 75 years, what possible justification can there be for the continued existence of this government monstrosity with it's $12.5 billion budget?

The Depression is over, unemployment has been at low levels. The SE no longer needs dragging into the 20th century, and electricity is abundent. What is there that requires a TVA that couldn't be better served by private companies?

Are you really in favor of big government involvement in what should be private enterprises?

 
At 5/27/2011 3:19 AM, Blogger Ron H. said...

"Beagle, I'm sitting here, high and dry, behind a big, old levee built by the WPA during the Depression."

You must not understand your own comment. If that's not smug, I don't know what is.

Without those levees, it's possible no one would have been harmed, because few would be foolish enough to farm on a flood plain that regularly goes underwater.

Do you understand the devastating effects of levees in channeling water further downstream that might otherwise cause only minor flooding?

What didn't you like about that piece of Reagan's speech I quoted?

You really are a big government advocate, arent you?

 

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