Tariifs:Lesser Of Two Evils

Lesser of Two Evils
The Associated Press article, "More Tariffs for Lumber", in the Times-Herald Record on October 31, 2001, discusses the new tariffs that the Bush administration will impose on Canadian lumber. The article states "Canada is dumping its wood on the United States at artificially low prices." The new tariffs would add an additional 12.6 percent duty to the 19.3 percent tariff already imposed on Canadian softwood lumber in August 2001. The 19.3 percent tariff was established because the Bush administration "found the Canadian government unfairly subsidizes its industry." " The United States and Canadian lumber industries have battled over prices for decades."
The United States lumber producers allege that "Canada charges unfairly low stumpage fees to companies that log on government lands, allowing Canadian firms to sell lumber in the U.S. for less than the cost of production and the fees amount to a government subsidy." The spokesperson for the Coalition for Fair Lumber Imports, a U.S. industry group, said, " Canada really needs to fix an unfair trade system" and "the tariffs ought to get their attention." Canadian producer deny the accusations and argue The North American Free Trade Agreement protects them.
This article discusses protective tariffs, which are intended to protect domestic industries from competition by keeping the price of competing import level with or higher than the price of similar domestic products. In turn, fewer units will be sold at the increased price causing fewer units to be imported. These tariffs greatly affect net exports, one of the components of GDP, as discussed in chapter 13. This article also discusses the barriers to international trade and the agreements to reduce trade barriers. NAFTA, covered in chapter 17, was created in 1989 and intended to eliminate tariffs over a 15-year period between Canada and the U.S…


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