U.S. Practices Trade Protection
December 9, 1998
Protectionists say the U.S. naively practices free trade with no restraint while other countries protect their domestic industries to maintain jobs and incomes. The result is massive U.S. trade deficits. However, the U.S. is far more protectionist than free trade opponents believe. For instance, a new report from the European Union (EU) identifies U.S. barriers to European exports:
- U.S. tariffs today are generally much lower than in the past, but high rates still remain on some goods; for example, rates on ceramics can go as high as 38 percent and those on certain textiles are as high as 33.6 percent.
- The U.S. has generally increased non-tariff barriers including user fees in lieu of tariffs, harbor maintenance taxes and gas guzzler taxes on luxury auto imports.
- In addition, the U.S. has increased paperwork and record- keeping requirements on imports, which the EU believes are irrelevant for customs or statistical purposes and appear designed solely to impede trade.
- And in recent years, the U.S. has aggressively used antidumping orders to prohibit the import or sale of products at lower prices than they are sold elsewhere.
A 1994 study by the Institute for International Economics estimates consumers would have gained $70 billion from the elimination of all tariffs and import quotas in 1990. This figure would be roughly $110 billion today.
Unfortunately, almost all the political pressure today is to expand U.S. protection. In a recent book, "Globaphobia: Confronting Fears About Open Trade," economists from the liberal Brookings Institution point out that restricting imports ultimately reduces the competitiveness of export industries, diverts attention away from better policies to aid workers and businesses pressured by imports, and invites increased protection by trading partners.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, December 9, 1998.
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