A needless trade war - East Valley Tribune: Opinion

A needless trade war

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Posted: Tuesday, May 3, 2005 8:54 pm | Updated: 9:33 am, Fri Oct 7, 2011.

You may not have noticed it but a trade war with some of the United States' biggest export markets began Sunday. And it won't be very noticeable — at first.

The 25-nation European Union has imposed 15 percent tariffs on U.S. clothing, sweet corn, stationery and construction cranes. Canada has slapped similar 15 percent levies on cigarettes, hogs and seafood. Six other nations — Brazil, Chile, India, Japan, Mexico, South Korea — have the right to impose sanctions.

The World Trade Organization is allowing these countries to retaliate against American exports because the U.S. is violating international trade regulations through the Byrd Amendment. If a foreign company sells products here at below cost, the U.S. government can impose equalizing tariffs to protect domestic producers. Under the Byrd Amendment, a U.S. company that wins a dumping case gets to keep the tariff revenue.

Anti-dumping laws are a dubious economic proposition at best; if other nations want to sell us stuff at less than cost, let them. And giving tariff money to private companies instead of the Treasury is terrible tax policy.

But the government has shelled out $1 billion in the four years since the amendment became law, and it has its supporters in a Congress that seems growingly taken by protectionist measures.

The Bush administration, exporters and free traders would like to see the amendment repealed, and it should be. The United States sacrifices moral authority when it flouts international trade laws it expects other nations to obey. And even small trade wars eventually raise prices and cost jobs.

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