Cowering from Consumer Choice: US Imposes Tariffs to Protect Whirlpool

[Aanker]

http://bbc.in/2DxVu8t

In yet another move restricting consumer choice and healthy competition, the Trump administration has swung decidedly anti-capitalist and imposed tariffs on washing machines and solar panels. In some cases, the tariffs land at around 50% on washing machines. The tariffs on solar panels were lower than expected.

The clear benefactor is American washing machine producer Whirlpool, which announced it would create 100-200 or so new jobs (which won't be filled anyway under current labour market circumstances) in flyover country. That's great news for a few Ohio workers, but bad news for the rest of the country, which will have to buy Whirlpool or face steep prices on competing washing machines from other countries.

Naturally, China and South Korea have reacted negatively to the news. But it's unlikely their opinions will factor into the policies of Trump and his grumpy rust belt followers.

[conon394]

Typical the US has long had a fixation on tariffs a truly outdated economic tool. In this case if the goal was to aid US solar panel manufacturing better ideals would be raising tax incentives for business and consumer to adopt solar - with a catch pf course the credit would higher for using domestic production. Second seeing as Chinese Solar companies have on average a fairly thin R&D budget the US government should focus on R&D grants and and the like to keep the US industry ahead of the game with products you can afford to make here. To the extent current Solar panels have become commodities you really can't beat China's combination of low wages, low safety standards, lax environmental regulation and corruption and the willingness of the Chines government to just pump money into target mega project or industry X.

The us e of Tariffs is so very 19th century, subsidies and tax beaks and defense grants are so much harder to fight with the WTO, aside being the least best /bordering on most worst tool for the problem (from a US perspective).

Read bit of Economic analysis this morning and if you are going to use tariffs (at least for Solar) the ones being imposed are not high enough. They look to be to be to low to really spur substantial expansion in US based production. So while domestic producers may add some marginal capacity when they expire the US will still not have the large scale capacity to compete at a sort of commodity product China turns out.

[NorseThing]

http://bbc.in/2DxVu8t

In yet another move restricting consumer choice and healthy competition, the Trump administration has swung decidedly anti-capitalist and imposed tariffs on washing machines and solar panels. In some cases, the tariffs land at around 50% on washing machines. The tariffs on solar panels were lower than expected.

The clear benefactor is American washing machine producer Whirlpool, which announced it would create 100-200 or so new jobs (which won't be filled anyway under current labour market circumstances) in flyover country. That's great news for a few Ohio workers, but bad news for the rest of the country, which will have to buy Whirlpool or face steep prices on competing washing machines from other countries.

Naturally, China and South Korea have reacted negatively to the news. But it's unlikely their opinions will factor into the policies of Trump and his grumpy rust belt followers.

From your link:

Manufacturing companies - Whirlpool, a US-based maker of washing machines, and the solar firms Suniva and Solar World Americas - had complained to the ITC and it found in their favour.

The ITC said that China had been selling "artificially low-priced" solar components in the US, assisted by state subsidies.

So do you believe that the ITC got it wrong? Well, it is your link so I am interested in your thoughts on this.

As conon394 mentioned that tariffs are a bit of 19th century thinking. I agree, but it is also a bit 19th century thinking that a government would subsidize and encourage dumping of surplus onto the world market. Free trade needs all participants to believe in free trade in the 21st century. Workers want to work and dumping and other international actions that depress artificially domestic worker activity is a bit why Pres. Trump is now president and what his 'America First' slogan is all about.

In other words to not like the tariffs and say nothing about the actions that led to the ITC findings is showing a bit of a bias, right?

[Aanker]

From your link:

So do you believe that the ITC got it wrong? Well, it is your link so I am interested in your thoughts on this.

As conon394 mentioned that tariffs are a bit of 19th century thinking. I agree, but it is also a bit 19th century thinking that a government would subsidize and encourage dumping of surplus onto the world market. Free trade needs all participants to believe in free trade in the 21st century. Workers want to work and dumping and other international actions that depress artificially domestic worker activity is a bit why Pres. Trump is now president and what his 'America First' slogan is all about.

In other words to not like the tariffs and say nothing about the actions that led to the ITC findings is showing a bit of a bias, right?

Because state subsidies like these amount to nothing but a transfer of wealth from Chinese taxpayers to American consumers. If the Chinese government wants to pay to support the demand for renewable energy, so as to renew the American power grid, that's great for America.

[tgoodenow]

I don't remember your thread about this when the EU lowered their import tariff on Chinese solar panels to almost the exact same rate in September of last year that Trump just imposed.

http://trade.ec.europa.eu/doclib/pre...ex.cfm?id=1717

Or your thread about import tariffs the EU imposed on Chinese steel products in August ??? Or the new EU tariffs on Brazilian, Russian, Iranian, and Ukrainian steel?

http://trade.ec.europa.eu/doclib/pre...ex.cfm?id=1706

https://www.cnbc.com/2017/10/06/reut...countries.html

Was the US government investigation that found the following wrong?:

An investigation in 2013 by the U.S. government, however, exposed a more disturbing story. Samsung and LG are indeed selling washers at lower prices, but doing so through a strategy called “dumping.” That is, they are selling below production cost with the goal of eventually driving U.S. manufacturers out of business.

https://www.huffingtonpost.com/entry...b0e60c4aa367f3

When are retaliatory tariffs for dumping acceptable? When it supports industries in your country but not the USA?

[Cyclops]

US is not the worst player in international trade, but they're hardly cleanskins.

Is this story being blown up as "Trump is a hypocrite"? Because the last guy (who I thought wasn't a bad bloke) oversaw some pretty repugnant trade decisions. Trump's windbag non-analysis aside, in Australia we felt the Trans Pacific deal was pretty two edged: the US let us set up a bit of a Pacific common market but the payoff was significant US interference in the regional player's economies and even political and legal systems. There was some nightmare stuff about intellectual property, the Disney effect, that was going to be imposed willy nilly on our very different system (I know a few lawyers who were extremely worried about the implications, for our economy, our arts industry and basic stuff like our sovereignty). From my POV (which is limited to an Australian perspective of course) Trumps "worst trade deal" ranting was way off the mark. We wanted access to the markets, but the price in US interference in domestic politics, law and culture was steep, and the financial benefits were skewed in the US' favour AFAIK.

As an aside the principle of the deal, increased economic integration, is seen as desirable for all the risks of exposure it brings. Most of the Trans pacific agreement parties are back at the table: this was unthinkable before, as the US could (and still could) scuttle it with a click of their fingers. However Trump's declared disinterest seems to have given the players carte blanche to put up their own deal. I wonder who gets screwed this time around? Given Trump now does the bidding of Congress maybe we should expect him to sink it: some smart cookie in Trade will word up the Republican leadership and they'll yank Trump's chain.

Back to the tariff war: I think this is a p

retty normal bit of trade hostility, to be expected when two systems as different as China and the US interact. Both are acting in accordance with domestic expectations, and neither leadership group would have much of a grasp of the other side's motivations. We've seen this before in the complete incomprehension that's left Korea partitioned and the war there unresolved well over half a century after the US blundered into it. My friends in import/export tell me of Chinese business amused confusion at our bribery laws. We are allowed to fly potential clients around the world, supply wine women and songs to them, but NO CASH! That would be corrupt!

[Aanker]

I don't remember your thread about this when the EU lowered their import tariff on Chinese solar panels to almost the exact same rate in September of last year that Trump just imposed.

http://trade.ec.europa.eu/doclib/pre...ex.cfm?id=1717

Or your thread about import tariffs the EU imposed on Chinese steel products in August ??? Or the new EU tariffs on Brazilian, Russian, Iranian, and Ukrainian steel?

http://trade.ec.europa.eu/doclib/pre...ex.cfm?id=1706

https://www.cnbc.com/2017/10/06/reut...countries.html

Was the US government investigation that found the following wrong?:



https://www.huffingtonpost.com/entry...b0e60c4aa367f3

When are retaliatory tariffs for dumping acceptable? When it supports industries in your country but not the USA?

The appeal to hypocrisy is a logical fallacy also known as 'tu quoque'. Just because I haven't posted about EU tariffs, or even if I was in support (erroneously) of EU tariffs, doesn't mean I'm wrong about US tariffs. Learn to construct specific arguments for the point and don't skirt around it with irrelevant personal attacks on my moral integrity.

For the record, I do not support tariffs in general, unless they make some sort of moral point (Russian occupation of Ukraine, for example). But I don't have to make a post every time someone imposes a tariff; this thread is about US-imposed tariffs, trade policy in the Asian-Pacific Region and anything else is off-topic.

As for the report: the whole point of trade is to increase our selection range of available products. We don't care about the closed markets in the other country, because ultimately we get the best they have to offer while their own consumers suffer from a lack of choice (ultimately a result of poor competition). Meanwhile, as Conor pointed out, there are far better ways to ensure the competitiveness of one's own companies (and we should be careful not to single out any one company in particular, like Whirlpool, because that is an unfair government intervention). Lower corporate tax rates, education, R&D funding etc...

[tgoodenow]

The appeal to hypocrisy is a logical fallacy also known as 'tu quoque'. Just because I haven't posted about EU tariffs, or even if I was in support (erroneously) of EU tariffs, doesn't mean I'm wrong about US tariffs. Learn to construct specific arguments for the point and don't skirt around it with irrelevant personal attacks on my moral integrity.

For the record, I do not support tariffs in general, unless they make some sort of moral point (Russian occupation of Ukraine, for example). But I don't have to make a post every time someone imposes a tariff; this thread is about US-imposed tariffs, trade policy in the Asian-Pacific Region and anything else is off-topic.

As for the report: the whole point of trade is to increase our selection range of available products. We don't care about the closed markets in the other country, because ultimately we get the best they have to offer while their own consumers suffer from a lack of choice (ultimately a result of poor competition). Meanwhile, as Conor pointed out, there are far better ways to ensure the competitiveness of one's own companies (and we should be careful not to single out any one company in particular, like Whirlpool, because that is an unfair government intervention). Lower corporate tax rates, education, R&D funding etc...

so let me see if I’m understanding this correctly. You think that intentional dumping should be allowed without repercussions? And that companies that compete in an international market can compete with companies that pay slave wages, have very little worker rights, and next to zero environmental regulations by lowering corporate tax rates, education, and R&D?

[Aanker]

so let me see if I’m understanding this correctly. You think that intentional dumping should be allowed without repercussions?

It seems to me that dumping in the first place would not be an effective strategy if US companies were more competitive. To me, answering someone else's protectionism (bad for them) with protectionism of our own (bad for us) seems counterintuitive. And anti-dumping measures are abused for explicitly protective purposes. Like here.

As for your other points, an informed consumer can decide whether or not they regard foreign pay as being 'slave wages', or if they think labour rights in China are a concern. In my mind, western industrial workers - protected as they are by their governments - earn too much and have too lavish worker rights anyway. Environmental concerns can be addressed by the consumer, international agreements, or consumer taxes that are collected with regards to CO2 contribution, regardless of the location of the source.