Monday, January 04, 2010

If Economists Wrote the News on Protectionism

WASHINGTON POST (Reuters) - A U.S. trade panel gave final approval on Wednesday to duties taxes ranging from 10 to 16 percent on cost-conscious firms in the U.S. who purchase low-priced Chinese-made steel pipe rather than high-price domestic pipe, in the biggest U.S. trade case to date against China American companies (and their shareholders, employees, and customers) who shop globally for their inputs and find the best value in China.

Read more here at the Enterprise Blog.


At 1/04/2010 1:14 PM, Blogger sethstorm said...

So does this mean you price out non-economic freedoms(the ones you don't see in China) for economic freedom(smoother transactions)?

...whether they just want to spite the US, or have no problem peddling junk.

I support the tariff as a US citizen that wishes to make our Benedict Arnolds think twice.

At 1/04/2010 1:40 PM, Anonymous Lyle said...

See the earlier post on rare earths for a good reason for the tarrif. Otherwise the chinese will monopolize an area by driving the us competition out of business and then charge an arm and a leg for the product. So the posts here are a bit contradictory.

At 1/04/2010 4:38 PM, Anonymous Anonymous said...

I don't think the problem is a Chinese monopoly. The problem is the west has banned businesses from mining for these metals. The same goes for steel. The US is whining to the WTO because China isn't exporting enough coke for the US to make steel.

For the most part, the wests material shortage problems are self imposed.

At 1/04/2010 8:10 PM, Anonymous Charice said...

Ha ha, great job professor. It's amazing the lens through which journalists view the world. It's like learning history from Howard Zinn.

China doesn't have a monopoly on rare earths because of our policies. They have a natural monopoly because of the relative difficulty of separating rare earths from other minerals. In short, their supply is better quality, similar to light, sweet WTI. As RE prices go up, it will become cost effective to extract from other sources. But technologies dependent on RE will become much more expensive, e.g. Hybrid vehicles. The next gen of computer memory will also depend on RE metals. We are also dependent on Bolivian lithium.

At 1/05/2010 8:03 AM, Anonymous geoih said...

Quote from sethstorm: "I support the tariff as a US citizen that wishes to make our Benedict Arnolds think twice."

How does making something that is already scarce and expensive even more scarce and more espensive through a government enforced embargo help anybody (other than the politically connected cronies of the government)?

So your logic is that the only way industries in the US can survive is to have all of our manufacturing materials substantially more expensive than those materials used by the rest of the world.

At 1/05/2010 8:14 AM, Anonymous Machiavelli999 said...

I support the tariff because all the protectionist policies China imposes on the US.

Whether its the much higher tariffs it places on US imports or its foreign exchange policy which keeps its currency artificially low to maintain an export advantage, China engages in rampant protectionism against the United States.

This creates unsustainable dynamics such as China produces to feed our consumption. It then takes the money it makes from its production and lends it back to us so we can consume some more.

At 1/05/2010 12:26 PM, Blogger juandos said...

"I support the tariff as a US citizen that wishes to make our Benedict Arnolds think twice"...

So this is your declaration sethstorm that your grip on basic economics is nil, eh?

Funny how your nickers are in a twist about the supposed lack of freedoms of the Chinese but you seemingly ignore the coming American Enslavement via Taxation...

At 1/05/2010 1:35 PM, Anonymous geoih said...

Quote from Machiavelli999: "China engages in rampant protectionism against the United States."

The monsters! They sell us stuff we want really cheap.

At 1/05/2010 2:32 PM, Anonymous Machiavelli999 said...

"The monsters! They sell us stuff we want really cheap."

No, what I meant is that they put high tariffs on goods that US manufactures and tries to export to China. Also, its cheap imports are cheap because it doesn't let its currency appreciate. Now you might think what's wrong with that. And I agree at first there is nothing wrong with a country that wants to be our virtual slaves, voluntarily taking less dollars for its goods.

The problem is this sets up large account deficits that tend to self-correct rapidly and cause recessions.

At 1/06/2010 7:32 AM, Anonymous geoih said...

Quote from Machiavelli999: "The problem is this sets up large account deficits that tend to self-correct rapidly and cause recessions."

The only problem with this has been that China has been spending their dollars on US treasury bonds to support a bloated US government, but that's hardly China's fault. They were just looking for the best return on their investment of dollars. The real problem is the deficit spending and bloated US government. Had the US government not been deficit spending, then those dollars going to China would have been spent on something more worthwhile than bureaucracy.


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