NCPA


Policy Issues

NCPA Publications

Both Sides

Editorial Opinions

Audio/Visual


NATIONAL CENTER FOR POLICY ANALYSIS
HOME / DONATE / ONE LEVEL UP / ABOUT NCPA / CONTACT US
The Consequences of Protectionism
Daily Policy Digest

Trade Issues / Tariffs and Other Trade Barriers

Monday, March 11, 2002
Even if President Bush had rejected new tariffs, the U.S. steel industry would still be heavily protected from foreign competition, says Bruce Bartlett. And the demand for protection -- and the consequences thereof -- will not end with the selective imposition of tariffs of up to 30 percent.

  • Some 80 percent of steel imports were already subject to tariffs under previous trade rulings, according to Brink Lindsey of the Cato Institute.
  • The decision sets a precedent for other industries that want increased protection against imports, such as domestic textile mills.
  • The steel industry has other demands, the most important of which is a government bailout of their so-called legacy costs -- health and pension benefits promised to retired steel workers that the industry can no longer afford.
The only argument in favor of the steel tariffs is that Trade Promotion Authority might die in Congress without them. But Japan and the European Union have already announced plans to challenge Bush's action. Even if they don't retaliate against the U.S. immediately, they undoubtedly will find ways to get even at some point.

This is why trade protection is so often self-defeating. What one industry gains in terms of lower imports frequently is paid for by other industries in terms of lost exports.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, March 11, 2002.

For text
http://www.ncpa.org/edo/bb/2002/bb031102.html

For more on Tariffs and Other Trade Barriers
http://www.ncpa.org/iss/tra
12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
601 Pennsylvania Ave. NW, Suite 900 South Building - Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
Copyright © 2002 National Center for Policy Analysis - All rights reserved.