I am, of course, an extremist where trade is concerned but even those who are entirely middle of the road fear the consequences of a trade war. That’s where we do this to punish them for that then they respond by punishing us for reacting and then….and then we spiral down into the sort of stupidity that Smoot Hawley caused in the 1930s. No, not caused the Depression but most definitely made it worse. Our problem, even for those middle of the roaders, is that we’ve now got China reacting in some petulance to the tariffs we’ve all been imposing upon Chinese steel. Reacting by imposing tariffs on our steel.
The reason I’m an extremist on trade is because I continually insist that imports are how we benefit from trade, they’re the point and purpose of the whole exercise. So, if someone “dumps” cheap imports on us then we’re making out like bandits. Hurrah! Send us more! MOAR even.
Agreed, this logic, impeccable as it is, doesn’t convince everyone. But there’s very few out there who want to see this sort of thing happening:
China’s Ministry of Commerce says it has imposed anti-dumping duties on steel imports from Japan, South Korea and the European Union.
The ministry said on its website Sunday that imports of grain-oriented electrical steel will be charged duties ranging from 37.3 percent to 46.3 percent.
Now, it could be that this has been done after a long, detailed and careful examination:
China began levying the duties on Saturday after an investigation by the country’s Ministry of Commerce found evidence of dumping that was harming Chinese industry, Xinhua said.
That isn’t quite the way I would bet myself to be honest:
China’s announcement is the latest in a tit-for-tat fight with other countries over the special metal known as oriented electrical steel.
In May last year the EU imposed similar duties on imports of Chinese oriented electric steel as well as products from other countries, in a move which Bloomberg News said was intended to curb competition for EU producers.
The decision prompted China to launch an investigation into imports from the European manufacturers.
Source: Forbes.com