Dump The DoC
I don’t apologize for returning to the long-running craziness of anti-dumping duties, which can have no result but to hurt consumers. This week, it is serial offender the US Department of Commerce that is in the spotlight over specialty steels. There are a lot of numbers and a lot of countries involved, but we’ll just focus on one pair: the DoC is proposing an anti-dumping duty of 407 percent (no, there are no decimal points missing, it’s four hundred plus percent) on non-oriented electrical steel (NOES), whatever that might be, from China. And in case you think this is just an anti-Chinese rant, there is a 200 percent duty on Swedish companies, for good measure. To be clear, that means that if a Chinese company sells NOES to a Chicago manufacturer for USD2,000 a tonne, it will actually cost the US importer more than USD10,000 a tonne, which is the “fair” price according to the DoC. Leaving aside the fact that the WTO provides ample means for the US to counter such unfair behavior, if it exists, I want to ask you a simple question: what Chinese company in its senses would want to sell NOES to a US competitor at less than a quarter of its real production cost? And before you say that the Chinese Government is setting out to ruin US producers of NOES (roughly speaking the DoC’s argument), you need to be prepared to believe the same about the Swedish Government. It doesn’t take a mastermind to work out that this is simply a protectionist ploy on the part of US NOES producers whose antiquated production methods (and in all probability whose unionist workers) render them hopelessly uncompetitive in world markets. This is not new behaviour on the part of the DoC, by the way; it has been singing the anti-dumping song for decades. And it is by no means only a US technique: the EU is just as bad. Ask the French! The solution to the problem is to move the authorization of anti-dumping duties (and their equally nasty cousin, countervailing duties) away from nation states and into an international body which would be able to resist producer capture. It’s very hard to understand why this hasn’t already happened at the WTO. Oh, OK, it’s not hard to understand. Sigh!