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Bush Declares Mandatory 44% Price Increase on all Shrimp Sold in the US

This is old news, but Bush Administration’s decision in 2004 to maintain shrimp tariffs was awful. If you remember, Bush imposed tariffs on steel in 2002, stubbornly insisting that European countries were somehow doing something illegal by keeping prices down. European countries sued, Bush lost, then appealed it. European countries sued in WTO, Bush lost and appealed. Bush lost…and then he lost big time. The World Trade Organization declared in no uncertain terms that Bush Administration had no right to impose arbitrary tariffs on foreign steel companies just because their prices on lower. Bush complied (he had no choice, WTO’s decisions are legally binding), but not after winning support from states with steel industries (i.e. Pennsylvania, Ohio, Indiana, etc). In other words, support a stupid and illegal policy in order to win votes, then comply only when you are threatened with the most severe of legal consequences.

Such a policy continues with shrimp. First, Bush administration finds evidence of “illegal dumping.” Then they impose tariffs ranging up to 200%. Countries like India, China, Vietnam and Indonesia complain, then appeal to the World Trade Organization (where it is now). After a year or two of waiting, WTO will consider the matter, and (I expect) rule against the Bush administration. Then, when WTO makes a decision against Bush Administration that is legally binding, Bush will appeal, and only when all the appeals (i.e., delaying tactics) are exhausted, will he comply.
Tariffs hurt the consumer, but we don’t see the harms directly. The price of shrimp remains high, but consumers have no reason to make a connection between the higher price of shrimp and the Bush Administration. This is a minor issue that never makes TV news reports, yet it is a classic case of incompetent governing. (The Cato Institute estimates that shrimp prices are 44% higher as a result of tariffs). Meanwhile, the domestic shrimp industry calls for even higher tariffs.

Here’s the irritating thing about the Republican Party. They claim to be the party for business, but in fact they choose mercantilism over free trade (and then act surprised when other countries do the same). That hurts various industries as well as the consumer’s pocket book. People have a kneejerk reaction to higher taxes. Why don’t they have a similarly negative reaction to higher prices resulting from tariffs?

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