Of Tariffs and the Aftermath of Katrina

As I watch the different coverage about how the relief efforts for victims of Hurricane Katrina are going, I’m struck by the level of care and concern people have for their fellow man. Very heartening. I’m also unsurprised to see that it’s politics as usual, however, particularly in the complicated world of international trade.
Here’s what I mean: Today the United States and Canada put aside our bitter fight [signup required] over lumber tariffs (whose prohibitive terms have cost Canadian lumber companies over $4.1 billion in punitive tariff fees so far) and are standing as best of friends here on the North American continent.
Meanwhile, our tariffs and quotas on clothes coming from China have been increased in the last few days, adding Chinese bras and synthetic fabrics to a list that already includes knitted shirts, cotton pants and underwear. It seems to me that clothing is just as much a staple, a core product to help us rebuild the devastated South and help families get back on their feet, as lumber is, however.
Is this a form of racism in the midst of everything else we’re dealing with nowadays?


The flip side of open trade and zero trade barriers is American jobs. The general employment question is always whether American workers get hurt when foreign nations ostensibly dump much lower priced clothes and lumber into our marketplace?
If you follow the tenets of open trade, the answer is yes, and no: workers are affected in the short term, but in the longer term, retraining and natural adjustments in economies allow each nation to produce that which it’s most able and that which is most profitable.
So how does this tie into Katrina?
Just that it’s an odd time to be relaxing tariffs from one nation while increasing tariffs – and tightening quotas – from another nation.
Adding to the complexity of this situation, the World Trade Organization has announced that it’s planning on issuing a report next month that supports the United States position on the lumber trade dispute, while NAFTA just announced that it believes Canada is right and the US is wrong on the lumber tariff dispute.
The bottom line, however, is always people. We have a lot of new houses and structures that need to be built in the next twenty-four months, and a whole heck of a lot of people to clothe.
I just hope that taking care of our citizens wins out over politics as usual.

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