Comments on: Dry Cleaning Is Killing My Pocketbook http://calpolymbatrip.com/2008/china/my-dry-cleaning-is-killing-me/ The OCOB Graduate Program Sun, 12 Oct 2008 07:57:21 +0000 http://wordpress.org/?v=2.6.1 By: Nick Miura http://calpolymbatrip.com/2008/china/my-dry-cleaning-is-killing-me/#comment-5260 Nick Miura Mon, 02 Jun 2008 23:03:51 +0000 http://calpolymbatrip.com/2008/china/my-dry-cleaning-is-killing-me/#comment-5260 This is a perfect example regarding what we're learning in macro-economics. Tax on a relatively inelastic service is being passed on to the consumer. I, like Rob, would have liked to see more data given in the article - even simple things like who is the government protecting with the act. I can't imagine that steel wire hangars are a driving force in the U.S. economy. By setting this precedent, it seems that the U.S. government might be walking a slippery slope. Can any American company feeling pressure from China or anywhere petition the government for protection? Also, even if the dumping claims are true, a 60% tariff is unbelievable - especially since that money is essentially coming out of American pockets. In attempts to hurt Chinese wire hanger manufacturers, you take money from American citizens and thousands of Mom and Pop dry cleaning stores, and reallocate it to local wire hangar manufacturers. Because dry cleaning and thus hangars are inelastic, this act will have little effect on Chinese imports. How does this help anything? This is a perfect example regarding what we’re learning in macro-economics. Tax on a relatively inelastic service is being passed on to the consumer. I, like Rob, would have liked to see more data given in the article - even simple things like who is the government protecting with the act. I can’t imagine that steel wire hangars are a driving force in the U.S. economy. By setting this precedent, it seems that the U.S. government might be walking a slippery slope. Can any American company feeling pressure from China or anywhere petition the government for protection?

Also, even if the dumping claims are true, a 60% tariff is unbelievable - especially since that money is essentially coming out of American pockets. In attempts to hurt Chinese wire hanger manufacturers, you take money from American citizens and thousands of Mom and Pop dry cleaning stores, and reallocate it to local wire hangar manufacturers. Because dry cleaning and thus hangars are inelastic, this act will have little effect on Chinese imports. How does this help anything?

]]> By: Rob Belloni http://calpolymbatrip.com/2008/china/my-dry-cleaning-is-killing-me/#comment-5083 Rob Belloni Tue, 29 Apr 2008 03:21:55 +0000 http://calpolymbatrip.com/2008/china/my-dry-cleaning-is-killing-me/#comment-5083 If the NY Times reporter wanted to create more meaningful content, they could have investigated domestic pricing of hangars in China, and compared those prices with pre-tariff export prices. The next step would have been to look at publicly traded US companies to evaluate per unit production costs of steel hangars in the US. The author did neither, which makes it difficult for the reader to make an informed judgment of the issue. Anti-dumping laws seem good on the surface, but it is very difficult to determine what tariff (if any) should be enforced against the foreign countries. In this case, I would imagine that the Chinese hangar manufacturers are government backed or government owned, and that specific information about their costs is not easily googled by the US Department of Commerce. In any case, I would tend to agree that a 60% tariff on steel hangars seems a bit ridiculous. Even if the Chinese are dumping, does the US really consider the steel hangar industry to be so valuable that it deserves this sort of protection? I can't imagine that such a low end item is of critical importance to our economy. Perhaps we would be better served finding an agreement as part of the Uruguay round of GATT to eliminate anti-dumping laws altogether. If the NY Times reporter wanted to create more meaningful content, they could have investigated domestic pricing of hangars in China, and compared those prices with pre-tariff export prices. The next step would have been to look at publicly traded US companies to evaluate per unit production costs of steel hangars in the US. The author did neither, which makes it difficult for the reader to make an informed judgment of the issue.

Anti-dumping laws seem good on the surface, but it is very difficult to determine what tariff (if any) should be enforced against the foreign countries. In this case, I would imagine that the Chinese hangar manufacturers are government backed or government owned, and that specific information about their costs is not easily googled by the US Department of Commerce.

In any case, I would tend to agree that a 60% tariff on steel hangars seems a bit ridiculous. Even if the Chinese are dumping, does the US really consider the steel hangar industry to be so valuable that it deserves this sort of protection? I can’t imagine that such a low end item is of critical importance to our economy. Perhaps we would be better served finding an agreement as part of the Uruguay round of GATT to eliminate anti-dumping laws altogether.

]]>