Lumber prices are GOING UP AGAIN because that’s the way Washington wants it! This letter was originally sent to the Gwinnett Daily Post back in August. The U.S. Department of Commerce has added ANOTHER tariff on top of the one implemented in August 2001. My updated letter was published on November 28, 2001. Political and economic incompetence are the norm in Washington.
President Bush and Don Evans, Secretary of Commerce, say they favor free trade. Both want Congress to give the President “fast track” trade authority. What they say does not match what they do.
In August, they announced a 19.3% penalty on imported Canadian lumber. In October, the Department of Commerce imposed an additional 12.5 % duty on Canadian lumber. U.S. producers claim that Canadian lumber has an unfair trade advantage. The truth is, Canadians work cheaper and are taxed less than American producers.
Import tariffs are the most common restriction to free markets. Governments use tariffs to protect favored constituents. Bush and Evans claim they are protecting American jobs. They ignore the American jobs that will be lost because fewer homes will be built and purchased. By restricting access to cheaper Canadian lumber, President Bush and Secretary Evans have decided to put American carpenters, plumbers, and electricians out of work. They decided that American consumers don’t need the products and services they might have purchased were it not for the higher priced lumber that went into their new home.
Trading with neighbors is good for our economy. This is true whether the neighbors live next door, across town, or in the adjacent state. When governments artificially restrict trade, they eliminate choices and create barriers. Trade can be restricted naturally by geography, distance, or language. Throughout history, people have worked to overcome natural barriers. That’s why they congregated in cities, along rivers, and around ocean harbors. Think about your own neighborhood. You know fewer stores and suppliers restrict your choices and increase prices.
In 1886 Henry George said,
Free trade consists simply in letting people buy and sell as they want to buy and sell. Protective tariffs are as much applications of force as are blockading squadrons, and their objective is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are means whereby nations attempt to prevent their own people from trading.
The price of lumber is going up. The President and Secretary of Commerce are either unaware of the economic consequences, or they don’t care because they are politically expedient. Trade restrictions ALWAYS benefit special interest groups at the expense of consumers. Instead of repaying political favors, they should be protecting our right to trade with whomever we want.