President Bush may declare himself a free trade
his steel tariffs are a fine example of the successful work
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
the positive results of the steel tariffs rather than
dodging them while
undeservedly declaring free trade as a propeller of U.S.
they would from this day forward stop advocating their
invisible hand policies.
According to free traders, protective tariffs
and are supposed to promote a potentially disastrous
according to the Wall Street Journal, certainly no beacon
protectionism or America First, imports of steel subject to
tariffs are on the rise. Hot-rolled steel imports are up 40%
from a year
ago. Imports of coated sheet steel increased 30%. Plate
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
non-dutiable goods after the Smoot-Hawley Tariff was signed
into law by
Another false claim of free traders is that
tariffs are bad
for consumers, and that consumers always end up paying the
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
between higher tariffs and economic growth.
Even as U.S. Steel expects its first year of
1999, it is raising prices for steel used in automobiles a
percent. Since automakers use only between $700 and $1,000
of steel in
their cars, consumers stand to get hit with a price increase
more than $100. In the days of 0% financing, this increase
at best with car prices so affordable. But even without the
incentives automakers are offering today, if you can't
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
steel from abroad? No. Most foreign steelmakers can't
produce and export
steel needed for automobiles cheaply enough to be
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
dumped steel is next to nothing.
All this information is enough to make any true
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,
assembled with all American steel. Chalk up another victory
protectionists, courtesy of a self-proclaimed free trade