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Title: In 2002, President Bush Imposed 30% Steel Tariffs; This Is What Happened Next
Source:
Zero Hedge
URL Source: https://www.zerohedge.com/news/2018 ... eel-tariffs-what-happened-next
Published: Mar 3, 2018
Author: Tyler Durden
Post Date: 2018-03-06 14:07:36 by Deckard
Keywords: None
Views: 1322
Comments: 24
In an eerie analogue of what is about to take place, on March 5, 2002 President George W. Bush imposed tariffs as high as 30% on global steel imports. The temporary tariffs of 8–30% were originally scheduled to remain in effect until 2005. They were imposed to give U.S. steel makers protection from what a U.S. probe determined was a detrimental surge in steel imports, as more than 30 steel makers had recently declared bankruptcy. Canada and Mexico were exempt from the tariffs because of penalties the United States would face under NAFTA. Additionally, some developing countries such as Argentina, Thailand, and Turkey were also exempt. The response was immediate. Domestically, some of the president’s political opponents, such as Democratic House Representative Dick Gephardt, criticized the plan for not going far enough. For some of the president’s conservative allies, imposing the tariff was a step away from Bush’s commitment to free trade. Critics also contended that the tariffs would harm consumers and U.S. businesses that relied on steel imports, and would cut more jobs than it would save in the steel industry. The international response – like now – was more vocal. Immediately after the announcement, the European Union announced that it would impose retaliatory tariffs on the United States, risking the start of a major trade war. To decide whether or not the steel tariffs were fair, a case was filed at the Dispute Settlement Body of the World Trade Organization (WTO). Japan, Korea, China, Taiwan, Switzerland, Brazil and others joined with similar cases. In a decisive decision, on November 11, 2003, the WTO came out against the steel tariffs, saying that they had not been imposed during a period of import surge—steel imports had actually dropped a bit during 2001 and 2002—and that the tariffs therefore were a violation of America’s WTO tariff-rate commitments. The ruling authorized more than $2 billion in sanctions, the largest penalty ever imposed by the WTO against a member state, if the United States did not quickly remove the tariffs. In retaliation, the European Union threatened to counter with tariffs of its own on products ranging from Florida oranges to cars produced in Michigan, with each tariff calculated to likewise hurt the President in a key marginal state. But it was the market’s response that broke the camel’s back: what followed immediately after the tariffs were announced was a 30% plunge in the S&P 500, a slump in the dollar and a rally in bonds that slashed 10Y yields in half. After receiving the verdict, both from the market and the WTO, the United States backed down and withdrew the tariffs on December 4, 2003. 
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#1. To: Deckard (#0)
Told ya you were a globalist wto worshipper. You're anti American. Wet your diaper it doesn't matter. Trump will continue course diaper rash weirdo.
You're anti American. You're a fricking clown. I don't GAS about the WTO - I do care about the economy and just like Bush's tariffs - Trump's will be equally as bad. Bush did the same thing Trump is doing now ...what followed immediately after the tariffs were announced was a 30% plunge in the S&P 500, a slump in the dollar and a rally in bonds that slashed 10Y yields in half. What makes you think this time will be any different?
Deckard, if you care about the economy, how would you suggest the trade deficit be remedied, if not through tariffs? Part of the problem is our fiat based economy. The US dollar is the "world reserve currency" and as such, has been in artificially high demand worldwide for the last 70 years or so. This has created an unhealthy environment where the US can support a trade deficit. Though technically, we are indeed exporting as much as we're importing in value. The problem is, however, that the imports we fail to pay for by exporting goods & services, we pay for instead by exporting fiat US dollars, which can be created by the banking system. In other words, what we export to make up the difference in trade is debt. IOU's in the form of US dollars. I mention this because if we were on a gold or silver standard, then running perpetual trade deficits like this would be automatically balanced out by creating a shortage of gold & silver within the USA as that limited commodity would flow out of the country. Shortages of G & S would make them more valuable within the USA, which would make subsequent imported goods more expensive even without tariffs. But no, we don't have that. We instead have a fiat money system with which more money is created out of thin air by the banking industry to replenish the supply of money within the USA while it simultaneously flows out of the country to buy imported goods. And that can't go on forever. So if not tariffs, what do you suggest can be done to balance the trade deficit?
There are no replies to Comment # 7. End Trace Mode for Comment # 7.
Top • Page Up • Full Thread • Page Down • Bottom/LatestIn a decisive decision, on November 11, 2003, the WTO came out against the steel tariffs,
#2. To: A K A Stone (#1)
(Edited)
the WTO came out against the steel tariffs,
#7. To: Deckard (#2)
I don't GAS about the WTO - I do care about the economy and just like Bush's tariffs - Trump's will be equally as bad.
Replies to Comment # 7.
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