terça-feira, setembro 23, 2003
Bush's tariffs deal the economy a $680 million hit
It's the classic protectionist result, with the benefits enjoyed by a concentrated and politically powerful few while the costs are diffused. According to the ITC, a quarter of the U.S. companies surveyed reported losing business to foreign competitors since the tariffs were imposed. That's a pretty significant burden for an economy struggling to come out of recession and already losing manufacturing jobs. And it's not the only cost the tariffs have imposed.
A third of these steel-consumer companies said that they had problems getting the steel they needed because contracts they had signed with suppliers were either modified or broken when the tariffs were imposed. The corresponding loss in reported profits totaled $190 million.
More than half of steel users said they had trouble passing costs on to customers, with 43% reporting they couldn't do it at all.
As for jobs, nearly 34% say that employment would go up if the tariffs were lifted.
The ITC report downplays the overall impact of this damage because of a strange bit of economic logic. It argues that these private-sector costs are almost entirely mitigated by the $650 million in new revenue that Uncle Sam took in from the tariffs. In other words, because the government got richer we're not supposed to worry about the competitive hit these companies have taken. That's the same logic Democrats use to assail the Bush income-tax cuts.
All of this is in addition to the damage the steel tariffs have done to U.S. trade leadership. It's hard for an American President to sell the cause of free-trade agreements to the rest of the world when he is protecting his own steel industry. That message will be reinforced soon enough, we suspect, when the World Trade Organization concludes later this fall that the tariffs are a violation of global trade rules.
We don't think Mr. Bush should wait for that to happen to amend his steel mistake, however. Whatever the political calculations that went into these tariffs, the message from the economy is clear: They're not worth it.
posted by Miguel Noronha 8:56 da manhã
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