Tuesday, December 02, 2003

Plays well with others?

The Bush administration is making $150 million in payments to U.S. steelmakers over the next two weeks under a program declared illegal by the World Trade Organization. The program, which aims to offset the economic damages caused by cowboy politics, has all the subtlety and finesse of some shithead kid squealing "I'm going to take my ball and go home".

Japan, the European Union and a host of other trading partners challenged the scheme, saying it violated WTO rules and would encourage more anti-dumping petitions.

The WTO agreed and in June set a Dec. 27 deadline for the United States to repeal the measure.

However, Congress adjourned for the year in November without taking any action on the provision.

Instead, more than two-thirds of the U.S. Senate has urged Bush to work out an agreement with the EU, Japan and other trading partners to preserve it.

So: we impose absurd tariffs, often for reasons more political than economical. The desired effect of the imposition of those tariffs is that American companies gain a price advantage versus their foreign competitors, thereby boosting the profits of the American companies. The 'Byrd amendment', which was supported by most of congress irrespective of party affiliation, dictates that the revenue raised by tariffs must be distributed to companies who apply for protection against 'below-cost' imports, i.e. the companies who lobbied to have the tariffs raised in the first place.

This of course leads to a sort of critical mass global inflation, wherein all of the other countries raise tariffs on US imports, so people buy less crap from the US companies, which leaves them no recourse but to petiton for higher tariffs to even the playing field. Ha! Truly evening the playing field would put half of all US companies out of business... we've built an empire on perks of an uneven playing field.

I'm getting out of my league with the 'playing field' analogy here... in the Great Game of American empire, I'm the guy wandering up and down the stands selling peanuts.

UPDATE: Backing down to international pressure (and violating yet another of his campaign promises), Bush has scrapped the tariff. The steel industry is not pleased.