  
 Supporting American-Made Products and Services from American-Owned Companies 
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President Bush may declare himself a free trade
president, but
his steel tariffs are a fine example of the successful work
of a
protectionist. The numbers are in, and they aren't pretty
for backers of
trade liberalization beholden to economic textbook theory.
If only free traders had the backbone to realize
and accept
the positive results of the steel tariffs rather than
dodging them while
undeservedly declaring free trade as a propeller of U.S.
prosperity,
they would from this day forward stop advocating their
disastrous
invisible hand policies.
According to free traders, protective tariffs
reduce imports
and are supposed to promote a potentially disastrous
isolationism. But
according to the Wall Street Journal, certainly no beacon
of
protectionism or America First, imports of steel subject to
the Bush
tariffs are on the rise. Hot-rolled steel imports are up 40%
from a year
ago. Imports of coated sheet steel increased 30%. Plate
steel imports
rose a more modest 10%.
A brief reading of U.S. trade policy would have
clued in free
traders that import tariffs don't always reduce imports.
Even during the
Great Depression, imports for dutiable goods rose almost
equally with
non-dutiable goods after the Smoot-Hawley Tariff was signed
into law by
Herbert Hoover.
Another false claim of free traders is that
tariffs are bad
for consumers, and that consumers always end up paying the
tariff. More
reading of U.S. trade history tells us that Abraham Lincoln
said it was
usually the foreign producer - not the consumer - who
usually ends up
paying the tariff. Honest Abe also found no negative
relationship
between higher tariffs and economic growth.
Even as U.S. Steel expects its first year of
profits since
1999, it is raising prices for steel used in automobiles a
mere 5-10
percent. Since automakers use only between $700 and $1,000
of steel in
their cars, consumers stand to get hit with a price increase
topping no
more than $100. In the days of 0% financing, this increase
is negligible
at best with car prices so affordable. But even without the
substantial
incentives automakers are offering today, if you can't
negotiate $100
off the price of a new car, you had better bring someone
with you who
can or stay away from the car lot.
Could domestic automakers skirt the tariffs and
import their
steel from abroad? No. Most foreign steelmakers can't
produce and export
steel needed for automobiles cheaply enough to be
competitive with
domestically produced steel. And even if they could, many
can't fit the
necessary quality requirements in quantities automakers
demand. So the
chance of your newly-built domestic car being assembled with
illegally
dumped steel is next to nothing.
All this information is enough to make any true
American
patriot proud. It can only add to the joy of buying a new
car, if you're
in the market for one, knowing that if it's made in the USA,
it's
assembled with all American steel. Chalk up another victory
for the
protectionists, courtesy of a self-proclaimed free trade
president.
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