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Import duties are taxes imposed on, and paid for, by Americans, not foreign producers
View related content: Carpe Diem
A recent BloombergPolitics article (“U.S. Imposing Anti-Dumping Duties on Chinese Aluminum Foil“) provides the latest example of hundreds that illustrate how routinely media reports on trade protection are one-sided stories that only present the viewpoint of domestic producers. For example, notice in the original BloombergPolitics article there is one word that is never mentioned: “consumer.” To correct for that producer bias when the media writes about trade protectionism, I provide some balance below with a re-titled, revised, edited (in bold) version of the BloombergPolitics article that includes the viewpoint of the American consumer.
New Title: “U.S. Imposing Anti-Dumping Duties on Americans Who Buy Chinese Aluminum Foil”
The U.S. imposed duties on American consumers who purchase imports of aluminum foil from China, ratcheting up trade tensions between the world’s largest economies before President Donald Trump’s visit to Beijing next month. The Commerce Department said Friday it would impose preliminary import duties in the range of 96.81 percent to 162.24 percent on Americans who buy Chinese aluminum foil, saying the goods are being sold at unfairly low prices. China disagreed with the U.S. move, as did American consumers and commercial users of aluminum foil, who welcome what U.S. producers’ pejoratively call “unfairly low prices.”
In August, Commerce imposed preliminary duties on American purchasers of Chinese aluminum foil, ranging from 16.56 percent to 80.97 percent, citing state subsidies for the domestic industry that disadvantage American products but greatly advantage American consumers.
The move indicates that the Trump administration intends to keep up the pressure on China as its efforts to shrink America’s trade deficit have seen little success, even though most economists agree that the political obsession with, and objection to, trade deficits is meaningless and without substance
China said the U.S. move ignored World Trade Organization rules and called on the government in Washington to fulfill its international obligations. “It not only hurts the interests of Chinese companies and American consumers but also dents the seriousness and authority of multilateral rules,” according to a Chinese Ministry of Commerce statement posted on its website on Saturday night.
The Aluminum Association Trade Enforcement Working Group, representing U.S. producers, is the petitioner in the countervailing duty and an anti-dumping case. The Aluminum Buyers for Expanded Trade Working Group, representing U.S. consumers, voiced its strong objections to the higher taxes, tariffs and prices that will be imposed on millions of Americans.
Trump has cited the U.S.’s roughly $350 billion trade deficit with China as evidence of the uneven playing field, and he’s vowed to crack down on unfair trade practices. Economists generally agree that Trump’s approach to trade is a recycled version of mercantilism that has been discredited for hundreds of years. Richard Epstein of the Hoover Institution referred recently to Trump’s thinking on trade as “sophomoric” and economist Don Boudreaux reminded us that the outdated, 17th-century mercantilism espoused by Trump is a toxic mix of economic ignorance, grotesque hypocrisy, and cronyism.
Yet so far, the administration has failed to deliver on tougher measures as it seeks stronger cooperation from China to combat North Korea.
MP: Despite Bloomberg’s repeated references to “duties being imposed on Chinese aluminum foil,” it can’t be emphasized enough that neither “Chinese aluminum foil” nor “Chinese producers of aluminum foil” will pay the duties or tariffs on imported aluminum foil. Rather the duties and tariffs are imposed on and paid for by, American consumers of aluminum foil, both at the household level and at the firm level. It also can’t be emphasized enough that duties or tariffs on imports are just “taxes,” imposed on and paid for by Americans. So whenever you hear about higher “tariffs” or “import duties” on imports, translate that to what it really is: “a tax hike on Americans.” And it’s a tax hike that will make America poorer, not richer or “great again.”