Monday, December 12

I'd just as soon they didn't protect me.

Surprising as it may be to Americans who think of their country as a bastion of free trade, shoes are just one of many products subject to high tariffs. Although the average tariff on non-agricultural goods imported into the United States is less than 3 percent, tariffs on a number of everyday consumer products -- including clothing, luggage, dinnerware and handbags -- range well into double digits. The same goes for some food, such as butter and cheese. (These tariffs are separate from special duties imposed on certain foreign products that the government has found to be "dumped," or sold at unfairly low prices.)

...the system has evolved in a way that produces a bizarre result: Some of the stiffest tariffs apply to the types of goods that people of modest means tend to buy, and lower duties are imposed on similar products that are more often purchased by upper-income individuals.

Sweaters offer a vivid example: If they're acrylic, the tariff is 32 percent. But if they're wool, the tariff is 17 percent. On cashmere sweaters, the tariff is lower still -- 4 percent -- and on silk ones, 0.9 percent. (Tariffs are levied on the "ad valorem" value of a product when it enters the United States -- the amount the importer pays, excluding insurance and freight. So for an acrylic sweater with an ad valorem value at the border of, say, $10, the 32 percent tariff would be $3.20.)

In the case of low-end sneakers, tariffs range between 48 and 67 percent, but tariffs on higher-end sneakers are only 20 percent, and for leather dress shoes, the tariff is 8.5 percent. Plastic handbags are hit with 16 percent tariffs but reptile-skin ones with only 5.3 percent tariffs. For drinking glasses, the tariff is 28.5 percent if the value at the border is 30 cents or less, but 5 percent if the value is $5 or more.
The answer in some cases -- though by no means all -- is that Congress has never gotten around to lowering certain tariffs that were once designed to protect major U.S. industries even though the industry in question has undergone major changes or almost disappeared.
You might think that getting rid of the tariffs would be a good idea, but industries like the protection, which they claim is all about their workers' jobs, neglecting to mention that the inefficient industries being protected are wasting resources. And then,
industries that rely on tariffs also argue that they need to be sheltered against imports as a matter of fairness because some foreign countries subsidize their exporters. The dairy industry, for example, asserts that subsidized butter and cheese from Europe and elsewhere would wipe out U.S. dairy farmers without lofty tariffs on those products.
Geez, if the Europeans want to subsidize the consumer, I'm all for it.

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