The iconography of steel tariffs
Posted by aogSaturday, 16 August 2003 at 10:09 TrackBack Ping URL

While President Bush has scored some major successes for free trade, still the steel tariffs loom large. I suspect that this is more because of iconography than the actual tarrifs (although the economic effect of them is clearly negative). The problem is that there simply doesn’t appear to be any political advantage to them for the Bush administration. The tariffs cost jobs while benefitting a very narrow segment of economy that heavily supports the Democrats. The question nags like a bad tooth - why is Bush taking heat in order to benefit the Democratic Party and some of its constituents? It would be a different issue if there was something in it for Bush or the Republicans. You can either assume Bush is stupid, that there is some non-apparent motive or that Bush really thinks that these kind of tariffs are a good idea. We’ll have a better idea in a few weeks when Bush has the opportunity to drop the tariffs under cover of boosting the economy and drops an albatross that has brought him and his party no benefits. It would be an excellent opportunity to use the bully pulpit to show why protectionism is a loser for the American economy.

Comments — Formatting by Textile
Joseph Somsel Wednesday, 27 August 2003 at 17:28

The answer to steel tariffs is the same as the answer to agricultural subsidies, at least in part - industrial policy.

Even in the age of plastics, our national security depends in part on indigenous steel production.

In a world with exploding population, especially in the Middle East, food will become a strategic weapon. Would Egypt be as willing to go along with our policies if one third of the people’s caloric intake were not provided, FREE, by the US taxpayer? Soon, most Arab countries, perhaps even Saudi Arabia, will need free food to feed their people.

We’re just maintaining our national infrastructure.

aog Wednesday, 27 August 2003 at 19:16

If we are ever in a situation where we can’t buy steel at reasonable prices we will have already lost. Steel isn’t a rare and precious commodity that is highly localized (as petroleum is). I simply don’t agree with the “national infrastructure” rationale.

End of Discussion