President Obama concluded 2011 by accomplishing the remarkable feat of making the United States look worse than Communist China when it comes to promoting global economic freedom. On December 29, the Obama Administration announced that sleeping bags from developing countries will now be subject to a 9 percent tariff. President Obama’s decision to hike tariffs on sleeping bags from developing countries came just one month after Hu Jintao, president of the People’s Republic of China and General Secretary of the Communist Party of China, announced the elimination of tariffs on …
A federal court this week barred the simultaneous application of anti-dumping and countervailing duties to imports from China, a practice begun by the Department of Commerce in 2007. Commerce has rightly classified China a “non-market economy” for purposes of applying anti-dumping duties against goods sold in the U.S. at below-market prices. At the same time, however, it has lifted that classification for purposes of applying countervailing duties against Chinese subsidies in the same sector. In a politically sensitive decision, the court ruled these two different kinds of duties could not be simultaneously …
Another day, another new subsidy for renewable energy. This time it’s a feed-in tariff, as Senator Dianne Feinstein (D–CA) recently inserted language supporting feed-in tariffs into the 2012 Energy and Water Appropriations bill. Feed-in tariffs subsidize renewable energy by forcing utilities to purchase renewable energy at fixed, above-market prices. The extra cost is then passed to the consumers. Feed-in tariffs are simply another subsidy that props up a selected industry and damages the economy, industry, and consumers. As of 2010, more than two dozen European countries had implemented feed-in tariffs, …
Though parents might be rejoicing that the time has come for their kids to head back to school, their happiness could be tempered by a little-known fact: They’re paying import taxes on everything from clothes to lunchboxes, musical instruments to pencils. In 2010, the government collected $25.9 billion in tariffs on imported items. Shoppers paid a total of $13.9 billion in tariffs on products like jeans, t-shirts, and tennis shoes. Tariffs are a hidden tax that increases the price of many popular back-to-school items. In the chart below, you can …
A lot of people are unhappy with China. They’re unhappy for several reasons, but trade and investment might top the list. Some are demanding that the U.S. government take steps to punish the PRC. A few of these steps make only a bit of sense—others make no sense at all. All of them, however, harm the American economy in addition to harming the Chinese economy, which is an odd way to cure a recession. There is cause to be unhappy with Chinese policy. Among other actions, China heavily subsidizes state-owned …
In a retaliatory response to the U.S. government’s unwillingness to eliminate domestic cotton subsidies, Brazil has announced higher tariffs on over 100 American goods ranging from cars to ketchup. Trade issues are central to the bilateral relationship between Brazil and the United States. Brazil is an attractive export destination for U.S. manufacturing, parts and capital equipment sectors. The United States has been the largest source of Brazil’s imports in these sectors, with the U.S. producers responsible for about a 15 percent share. The already thriving Brazilian market for U.S. exports has great …
This past Sunday marked an important anniversary for the American economy. On November 22, 2006, the United States and Colombia signed the U.S.-Colombia Trade Promotion Agreement. This agreement would immediately eliminate tariffs on U.S. exports to this important trading partner – creating billions in revenue for U.S. businesses and new jobs here in America. Unfortunately, it is an anniversary marked by missed opportunities. Instead of implementing this agreement when it was sent to Congress more than 18 months ago, Speaker Pelosi opted to block its consideration indefinitely. Passage of this …
Few economists have a good word for the Smoot-Hawley tariffs of 1930, which provoked a worldwide round of competitive protectionism that reduced trade, deepened and prolonged the Great Depression, and aided the rise of the Nazi Party. Out of that disaster came a bipartisan consensus: the U.S., for decades a protectionist country, needed to stand for free trade. Against considerable opposition at home and abroad, the U.S. led the charge for global openness after 1945. At first, the struggle centered on tariffs and quotas. But the U.S. soon came to …
The Brazilian is preparing to bring the fight over ethanol tariffs to the World Trade Organization’s doorstep. Currently there is a 54 cent tariff on the importation of ethanol into the United States, and Roberto Azevedo, Brazil’s WTO ambassador, said there was a “strong possibility” that the country would formally file a complaint to the WTO in September. Advocates of the tariff suggest that it will protect American farmers and considers ethanol outside the WTO’s jurisdiction. The ethanol tariff is a blatant violation of free trade principles and does nothing …
Looking at the relationship between protectionism, subsidies, and world hunger, American Enterprise Institute visiting scholar Adam Lerrick writes: The world has the ability to feed itself at affordable prices. There is no shortage of productive land. Large tracts in Ukraine, Kazakhstan, and Brazil offer huge potential. Putting fallow acres back into production could quadruple Russian cereal output to 300 million tons each year. The labor, technology, and capital are all at the ready. So why has the market failed to respond to this most basic of human needs? In the …
