Rasmusen Weblog

« Three Theories of International Trade;Hummels Paper | Main | Poverty and Government Aid: Facts and 90's Trends »

November 23, 2004

Steel Tariffs; Appropriations vs. Entitlements

Remember the Bush steel tariffs? Here is the latest from the Washington Post.

The European Union has requested talks with the U.S. government over antidumping duties that have hit a British steel firm in the first step toward asking the World Trade Organization to condemn the U.S. tariffs, EU officials said Tuesday.

The EU maintains that the United States is breaching the rules of global commerce through its tariffs of almost 126 percent on imports of stainless steel bars made by Firth Rixson Special Steels Ltd.

Washington imposed the duties in March 2002, claiming the company was unfairly dumping cheap goods on the U.S. market....

Last year the Bush Administration removed "safeguard" duties imposed on imported steel to protect domestic producers after they were declared illegal by the WTO.

So we imposed extraordinary steel tariffs, waited for the WTO to declare them against WTO rules (which they obviously were) and then lifted them. We still, however, have some steel tariffs, through the ordinary process of having the U.S. International Trade Commission say that dumping (charging unfairly low prices) is going on.

There was much complaint about Bush's extraordinary steel tariffs, but little against the ordinary process. This illustrates a general point: what is most dangerous in government is not the special favors, but the routine ones. Special favors come and go; routine favors stay and stay. The same thing goes on with appropriations (porkbarrel spending on senior citizen centers, for example) and entitlements (Medicare). Appropriations get the attention, but entitlements are a bigger problem. Appropriations do go down sometimes; entitlements, almost never. The only example I can think of is the welfare reform of the 1990's, and I'm not sure that actually reduced spending.

This makes me more forgiving of the extraordinary steel tariffs and the rise in appropriations spending under Bush of which many people complain. If those payments are necessary to get support for more important things such as the war in Iraq or confirmation of judges who won't violate their oaths, they're worth it.

On the other hand, it makes me less forgiving of the Medicare drug benefits that Bush passed. Like the Americans with Disabilities Act that Dole helped pass, those drug benefits will be with us a long time, and with little political benefit.

Posted by erasmuse at November 23, 2004 08:54 AM

Trackback Pings

TrackBack URL for this entry: http://www.rasmusen.org/mt-new/mt-tb.cgi/316

Comments