The Iron(y) in Steel Protectionism

Scott Lincicome andGabriella Beaumont-SmithIn the midst of highinflation, the federal government continues to build on bad policies for the U.S. housing market. Instead of addressing current rules creating an inflexible environment for building houses, the government imposed new duties on steel nails, a crucial component for home construction. These duties will increase the cost of construction, further contributing to scarce housing and higher home prices.Last month, the United States International Trade Commission (ITC) predictablydetermined that the U.S. nail industry has been injured by “dumped” and “subsidized” steel nails from India, Oman, Sri Lanka, Thailand, and Turkey. The decision paves the way for new taxes (duties) on those imports to protect American nail‐​makers and, in the process, provides several important lessons about the problems with the U.S. “fair tr ade” (antidumping and countervailing duty) laws that facilitate these measures.Under U.S. law, a product isconsidered dumped if a foreign company is selling it, “at less than fair value.” And if a foreign government subsidizes the production of a good sold in the U.S., these subsidies may also result in the product being sold “at less than fair value.” American businesses can therefore petition the U.S. government to correct these “unfair practices” under antidumping and countervailing duty law. Antidumping and countervailing duty investigations are notori...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs