Who’s dumping on consumers?

Do you like shrimp but wish it cost more? Need bedroom furniture but hate getting a good deal on it? If so, you're very different from most Americans. You are, however, one of the few who can rejoice in our national trade policies.

Politicians know U.S. consumers are more than happy to buy foreign goods if the quality is sufficient and the price is right. They also know explicit efforts to shut out imports are usually political fool's gold, more likely to bring defeat than victory at the polls.

So how can our leaders cater to corporate executives and workers who resent competition, without looking like hidebound protectionists? Simple: They don't attack trade -- they attack "dumping."

When it comes to trade, many Americans cherish the notion we are victims of our innocent good-heartedness. In this picture, we're always being cynically exploited by underhanded foreigners while our own companies play by the rules.

The anti-dumping laws are supposed to correct the problem by banning any imports sold below "fair value," a baffling concept understood by bureaucrats but not economists.

The Bush administration made use of the law this week when it proposed slapping shrimp producers from China and Vietnam with special import duties of up to 113 percent. Earlier, it imposed such tariffs on wooden bedroom furniture from China. It's also taken steps toward similar action on all sorts of foreign items, including lumber from Canada, aluminum from South Africa and steel wire strand from South Korea.

A spokeswoman for the Commerce Department's International Trade Administration, when asked how many anti-dumping orders are now in effect, responds as if I've invited her to count all the cactuses in Arizona. She can't come up with a tally on short notice but says it is "in the hundreds, maybe more than hundreds." And that doesn't include those pending.

For an administration that boasts of its devotion to tax cuts, these efforts represent an unnoticed and unwarranted tax increase on American manufacturers, retailers and consumers. They also violate the president's supposed faith in free trade, which he touts as a contrast to Democrat beliefs that, in his words, "the solution to jobs uncertainty is to isolate America from the world."

The theory behind the anti-dumping laws is that foreign companies get all sorts of subsidies from their governments, which allow them to sell at prices that would bankrupt any legitimate producer. Other countries supposedly solve their overproduction problems by unloading their excess goods on the U.S. market, helping their workers at the expense of ours.

The concept of "predatory pricing" is not entirely implausible. But you don't need anti-dumping orders to deal with such wrongdoing -- it can be prosecuted (and punished more sternly) as an antitrust violation. In fact, as the Congressional Budget Office notes, "Few dumping cases today involve predatory pricing, and the law makes no attempt to restrict duties to such cases." It's like prosecuting people for grand larceny though they are not accused of stealing anything.

The rules have no visible connection to economic logic. If a company sells an item here below the price it charges in its home market, it's guilty. But companies charge different prices in different markets for all sorts of sound reasons. A grocery chain may offer apples or paper towels cheaper in Barren Flats, N.D., than in Beverly Hills, Calif., and no one from the government will come out to investigate.

Selling below cost is also considered proof the foreigners are cheating. But U.S. retailers unload stocks below cost anytime they find themselves stuck with unwanted inventories -- which is why you might get a great deal on ski gear or snow blowers right now. Foreign producers, however, are punished for marketing tactics that are perfectly legal when used by our very own corporations.

The concept of fair value is so incomprehensible it can penalize foreigners who do exactly what they are supposed to do. As trade specialists Brink Lindsey and Daniel Ikenson noted in a 2002 study for the Cato Institute, a foreign company that offers the same price at home it does here but changes the price in a given period may be punished for dumping -- even though it has always charged everyone exactly the same.

I'm sure the laws against dumping catch some foreign companies that do things they shouldn't. But that's mostly by accident. The burden on U.S. consumers is purely intentional.

Steve Chapman is a nationally syndicated columnist.